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Determinants of Lending Interest Rates of Nepalese Commercial Banks

Economic Journal of Development Issues

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Title Determinants of Lending Interest Rates of Nepalese Commercial Banks
 
Creator Bhattarai, Yuga Raj; Patan Multiple Campus, Tribhuvan University
 
Subject Economics
Bank; Lending interest rates; Deposit rate; Return on assets; Credit risk
 
Description The aim of this study is to investigate the determinants of lending rate of Nepalese commercial banks. The analysis of data was based on a sample of 6 commercial banks observed over the period 6 years (2010 to 2015). The models used in the study were: pooled OLS model, fixed effects model and random effects model. This study has used ‘lending rate’ as dependent variable, while the explanatory variables are: operating cost to total assets ratio, deposit interest rate, profitability (ROA) and default risk. The estimated results of these three regression models reveal that operating costs to total assets ratio, profitability (ROA) and default risk have significant positive impact on the commercial bank lending rate. However, deposit rate has negligible impact on lending interest rate. Thus, this study concludes that the major determinants of commercial banks’ lending rate are: operating costs to total assets ratio, profitability (ROA) and default risk in Nepalese perspectives.Economic Journal of Development Issues Vol. 19 & 20 No. 1-2 (2015) Combined Issue, Page: 39-59
 
Publisher Department of Economics Patan Multiple Campus
 
Contributor
 
Date 2017-07-07
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-Reviewed Article

 
Format application/pdf
 
Identifier http://www.nepjol.info/index.php/EJDI/article/view/17701
10.3126/ejdi.v19i1-2.17701
 
Source Economic Journal of Development Issues; Vol 19 & 20 (2015); 39-59
2091-2285
2091-055X
 
Language eng
 
Relation http://www.nepjol.info/index.php/EJDI/article/view/17701/14370
 
Coverage Nepal


 
Rights Copyright (c) 2017 Economic Journal of Development Issues