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Determinants of Non Performing Loans in Commercial Banks: A Study of NBC Bank Dodoma Tanzania

International Journal of Finance & Banking Studies

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Title Determinants of Non Performing Loans in Commercial Banks: A Study of NBC Bank Dodoma Tanzania
 
Creator Nadham, N. Viswa; UNIVERSITY OF DODOMA , DODOMA, TANZANIA
B, Nahid
 
Subject BANKING, FIANCE
ALM IN BANKING, NPAs , BANKING PERFORMANCE.
 
Description The study attempts to ascertain the determinants of nonperforming loans in National Bank of Commerce. Data was collected from 152 respondents. Tables, percentages, mean and standard deviation were used to analyze data. Data collection methods adopted for the study were interview, questionnaire and documentary evidence. Interest rate, GDP, concentration of lending activities, bank’s loan supervision capacity and economic condition were investigated, and the results suggest that interest rate, GDP, bank’s loan supervision capacity and economic condition influence the level of NPLs. However, the results did not suggest that concentration of lending activities increase the level of NPLs.   The study suggests that banks should put in place a vibrant credit process that ensures proper customer selection and risk identification, robust credit analysis, proactive monitoring and clear recovery strategies for bad loans, formulate clear policy framework that addresses issues of ethical standards and check and balance credit process, organizational capacity enhancement of banks, deliberate effort to develop credit culture for managing loans ,and ensure prudent policies that govern bank loans. Since the results for this study were encouraging, the researcher encourages replicating the study for other lending institutions. In order to extend the literature on non-performing loans, the researcher suggested incorporating models of Golem effect, Social loafing, Inverted pyramid effect, Pollyanna effect and High default culture effect.  Also, basing on the merits of the study, the researcher suggests determining relationship between non-performing loans and loan size, collateral, credit culture, and credit management information system.
 
Publisher SSBFNET
 
Contributor —
 
Date 2015-03-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/372
 
Source International Journal of Finance & Banking Studies (ISSN: 2147- 4486); Vol 4, No 1 (2015): JANUARY; 70-94
2147-4486
 
Language eng
 
Relation http://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/372/283