MACROECONOMIC DETERMINANTS OF NON-PERFORMING LOANS OF DMBS IN SUB-SAHARAN AFRICA COUNTRIES

Osazee Godwin Omorokunwa and Osabo Michael Emovon

Journal of Academic Research in Economics, 2024, vol. 16, issue 2 (July), 444-461

Abstract: This study focused on the determinant of macroeconomic variables on the non-performing loans of banks in the sub-Saharan African region using the fixed effect panel regression method. Data from twenty-two SSA countries from 2010 to 2021 were used. The results from the study provide a general indication that the macroeconomic environment matters a lot for non-performing loans within the banking sectors of SSA countries. It is therefore recommended that banks in the SSA sub-region learn to develop adaptive mechanisms to address the effects of macroeconomic shocks on their loan policy. These measures may come in the form of well-diversified portfolio systems that will improve banks' hedging.

Keywords: Macroeconomic variables; Non-Performing Loans; Institutional factors; Deposit Money Banks; Sub-Saharan Africa. (search for similar items in EconPapers)
JEL-codes: E02 E44 G21 N27 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:shc:jaresh:v:16:y:2024:i:2:p:444-461

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