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Author: Mequanint Zeleke
Publisher: GRIN Verlag
ISBN: 3346123812
Category : Business & Economics
Languages : en
Pages : 68
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Book Description
Research Paper (undergraduate) from the year 2018 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , language: English, abstract: This study is attempted to examine factors affecting non -performing loan of development bank of Ethiopia. The main objective is to examine the factors affecting nonperforming loans in DBE central region. After problem identification, research hypothesis was developed which inquires the relationship and effect of non-performing loans on development bank of Ethiopia. Both secondary and primary data were used in the research. The data is then analyzed using descriptive, correlation and regression techniques through SPSS and Stata software program. The findings of the study revealed that gross domestic product has a positive impact on the occurrence of non-performing loans while other model variables unemployment, inflation rate and exchange rate have no impact on the occurrence of non-performing loan in which negatively affect non-performing loan. according to my study result. Also the result of the primary data indicated that in regarding about customer's specific causes, the result showed that credit culture of customers, lack of business knowledge, delayed approval, profit of the business, business location were determinants of non-performing loan while bank specific factors include poor credit assessment, poor customer selection, aggressive lending policy, borrowers culture, credit size affected non-performing loan.
Author: Mequanint Zeleke
Publisher: GRIN Verlag
ISBN: 3346123812
Category : Business & Economics
Languages : en
Pages : 68
Get Book Here
Book Description
Research Paper (undergraduate) from the year 2018 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , language: English, abstract: This study is attempted to examine factors affecting non -performing loan of development bank of Ethiopia. The main objective is to examine the factors affecting nonperforming loans in DBE central region. After problem identification, research hypothesis was developed which inquires the relationship and effect of non-performing loans on development bank of Ethiopia. Both secondary and primary data were used in the research. The data is then analyzed using descriptive, correlation and regression techniques through SPSS and Stata software program. The findings of the study revealed that gross domestic product has a positive impact on the occurrence of non-performing loans while other model variables unemployment, inflation rate and exchange rate have no impact on the occurrence of non-performing loan in which negatively affect non-performing loan. according to my study result. Also the result of the primary data indicated that in regarding about customer's specific causes, the result showed that credit culture of customers, lack of business knowledge, delayed approval, profit of the business, business location were determinants of non-performing loan while bank specific factors include poor credit assessment, poor customer selection, aggressive lending policy, borrowers culture, credit size affected non-performing loan.
Author:
Publisher: GRIN Verlag
ISBN: 3346985059
Category : Business & Economics
Languages : en
Pages : 92
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Book Description
Master's Thesis from the year 2023 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , language: English, abstract: The main objective of this study was to examine the determinants of non-performing loans in the case of the Development Bank of Ethiopia, Bahir Dar District. Descriptive and explanatory research designs were employed. The study uses both a quantitative and qualitative research approach. The study also uses both primary and secondary data sources. The primary source was collected from all 125 employees using questionnaires and interviews conducted with concerned managerial staffs of the district. The secondary source was gathered from DBE manuals, policy and procedure of the bank, NBE directives, bank's T-24 system, loan positions and provisions documents. The data was analyzed and interpreted by using descriptive and inferential statistics with the help of SPSS version 22.0 and qualitative analysis like interview and document analysis. The correlation between independent variables (bank specific and External factor) and dependent variables (nonperforming loan) were tested by using person correlation and the casual relation was analyzed by using linear multiple regression analysis. The finding of the study indicate that credit assessment, project monitoring, credit appraisal, bank top management, political and social instability, availability of infrastructure, collateral strength and market factor are significant factors for occurrence of non-performing loans. However, credit term and condition and lending interest rate are insignificant factor for the occurrence of non-performing loans. Finally, the study recommends the district should perform proper selection of customers and make appropriate due diligence based on KYC assessments, proper monitoring and follow up as per the schedule, make accurate credit appraisal, granting loans via strong collateral coverage, sound decision made by top management based on policy and procedure of the bank, improve capacity of credit performer by providing relevant training.
Author: Sirak Aynalem
Publisher:
ISBN:
Category :
Languages : en
Pages : 97
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Book Description
This study investigates the factors affecting Non-Performing Loans of Commercial Bank of Ethiopia during the period from 2002 to 2015. The variables were chosen based on findings from the previous literatures. A mixed research approach and explanatory design were adopted in carrying out this research. Secondary time series data were collected from audited annual reports and performance reports of the bank; and the required ratios were calculated. In addition, 12 credit experts from the concerned departments and functional units responsible for lending matters in the bank were interviewed. Multiple linear regression equation was used to estimate the model using SPSS version 20 software. The results obtained from regression output indicated that among the studied variables, loan to deposit ratio; financial performance measured in terms of return on equity; and capital adequacy were found to be statistically significant determinant of NPLs. On the other hand, loan growth, cost efficiency and bank size were statistically insignificant in affecting NPL. The findings from the interview result indicates that, variables such as poor credit risk assessment, focusing on collateral based lending, poor loan monitoring and follow-up, poor banker's skill in dealing with lending matters, undiversified loan products, short loan life and lack of credit advisory practices were also the bank specific factors that affect NPLs of CBE. The study suggests that focusing on these NPL indicators could further reduce the probability of default while extending credit in the future. Further studies were recommended by including macroeconomic and other bank specific variables; and by increasing the sampled periods.
Author: Kebede Adane
Publisher: GRIN Verlag
ISBN: 3346298728
Category : Business & Economics
Languages : en
Pages : 82
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Book Description
Master's Thesis from the year 2020 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , course: Business Adminstration, language: English, abstract: The main objective of the thesis is to assess the effect of credit risk management on the quality of loans portfolio in the case of Development Bank of Ethiopia. A sample of 84 respondents was drawn from the employees of the Development Bank of Ethiopia by using purposive sampling technique. Both primary and secondary data were used. Data related to loan portfolio and loan position is obtained from the bank whereas, primary data are collected using structured questioners from the employees of the bank. Descriptive and inferential statistics were used to conduct the research and Multiple Regression Analysis was run using SPSS Version 21.0 to analyze the data. With regard to credit risk management practices, the result show that DBE has not satisfactory risk Management practice. Precisely, using score 1 (poor) to 5 (best), all the parameters of risk management practice assessment have a score value below 3.40, i.e. Credit Risk Granting and Portfolio Quality Control (3.40), Credit Risk System and Standard (3.20), Credit Risk and Portfolio Quality Control (3.17), Risk Identification, Measurement and Control (3.03), and Risk Environment (2.98). The Bank`s loan portfolio is also more vulnerable to various types of risks, such as to unpredictable risk, predictable, and controllable risks. The bank’s NPL ratio was above 15% for the last five years. The regression result also showed that sound credit granting process and the existence of comprehensive risk management system and standards are the significant variables that affect loan portfolio quality of the Bank. Credit risk management practice of the bank has insignificant effect on loan portfolio quality. Both in terms of Non-performing loan and concentration, DBE has poor loan portfolio quality which is due to the bank’s poor credit risk management practice. Therefore, there is a need to improve and enhance credit risk management practice of the Bank, especially, by improving the credit granting process to have sound credit risk management, and by updating credit risk management system and standards so as to have strong credit management.
Author: Luc Eyraud
Publisher: International Monetary Fund
ISBN: 1513576518
Category : Business & Economics
Languages : en
Pages : 85
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Book Description
Sub-Saharan African countries are facing an unprecedented health and economic crisis that is likely to severely hurt credit quality and raise non-performing loans from already high levels. Banks have a critical role to play not only during the crisis by providing temporarily relief to businesses and households, but also during the recovery by supporting economic activity and facilitating the structural transformations engaged by the pandemic.
Author: Irina Bunda
Publisher: International Monetary Fund
ISBN: 1513583093
Category : Business & Economics
Languages : en
Pages : 23
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Book Description
The coronavirus (COVID-19) crisis, which has hit financial systems across Africa, is likely to deteriorate banks’ balance sheets. The largest threat to banks pertains to their loan portfolios, since many borrowers have faced a sharp collapse in their income, and therefore have difficulty repaying their obligations as they come due. This could lead to a sharp increase in nonperforming loans (NPLs) in the short to medium term.
Author: Mr.Mauro Mecagni
Publisher: International Monetary Fund
ISBN: 1513501755
Category : Business & Economics
Languages : en
Pages : 39
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Book Description
Banking in SSA has undergone very significant changes over the last two decades. Financial liberalization and related reforms, upgrades in institutional and more recently the expansion of cross-border banking activities and the rapid development of Pan-African banking groups are signaling greater financial integration and significant changes in the African banking and financial landscape. Nonetheless, excess liquidity in many countries reflects limited lending opportunities and, despite improvements, asset quality and provisioning remain comparatively low. Dollarization has also been a persistent characteristic in several natural resource-dependent economies. This paper discusses key stylized facts and trends of banking development in SSA, looking at a variety of dimensions such as size, depth, soundness, and efficiency. It also assess the rapid expansion of pan-African banking groups, which have overtaken the role of the European and U.S. banks that had traditionally dominated banking activities in SSA, creating significant cross-border networks and becoming the largest participants in new syndicates and large bilateral loans to finance infrastructure development.
Author: Hippolyte Fofack
Publisher: World Bank Publications
ISBN: 0051110172
Category : Banks and banking
Languages : en
Pages : 36
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Book Description
"This paper investigates the leading causes of nonperforming loans during the economic and banking crises that affected a large number of countries in Sub-Saharan Africa in the 1990s. Empirical analysis shows a dramatic increase in these loans and extremely high credit risk, with significant differences between the CFA and non-CFA countries, and substantially higher financial costs for the latter sub-panel of countries. The results also highlight a strong causality between these loans and economic growth, real exchange rate appreciation, the real interest rate, net interest margins, and interbank loans consistent with the causality and econometric analysis, which reveal the significance of macroeconomic and microeconomic factors. The dramatic increase in these loans is largely driven by macroeconomic volatility and reflects the vulnerability of undiversified African economies, which remain heavily exposed to external shocks. Simulated results show that macroeconomic stability and economic growth are associated with a declining level of nonperforming loans; whereas adverse macroeconomic shocks coupled with higher cost of capital and lower interest margins are associated with a rising scope of nonperforming loans. These results are supported by long-term estimates of nonperforming loans derived from pseudo panel-based prediction models. "--World Bank web site.
Author: M. Ayhan Kose
Publisher: World Bank Publications
ISBN: 1464815453
Category : Business & Economics
Languages : en
Pages : 403
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Book Description
The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
Author: Beyan Kedir
Publisher: GRIN Verlag
ISBN: 3346385760
Category : Business & Economics
Languages : en
Pages : 82
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Book Description
Master's Thesis from the year 2020 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, , language: English, abstract: The main objective of this study is to identify the major factors influencing the adoption of Interest free banking products and services among customers in Bale Robe town. The research employs decomposed theory of planned behavior to investigate the influence of customer’s behavior towards adoption of interest-free banking product and services by using customers attitude attribute social influence and perceived behavioral control. Both qualitative and quantitative research approach were applied in the study. The target populations were 13050 customers of four banks in Robe town and the total sample size were 388. A purposive sampling technique was applied. Primary and secondary data were used with five point liker scales to collect data from respondents. Both descriptive and inferential statistics analysis were employed to analyze the data. Interest free banking is inseparable of Islamic economics which aimed at realization of a greater justice in human endeavor, which is achievable only with participation of all human institution inclusive of financial system. On the principle that prohibits interest and other unethical and non shariah compliant activities, Islamic banking set to achieve this gigantic objective. In addition, it strive on increasing all Halal aspect of business through provision of products and services base on shariah principle with implementation of legitimate profit and loss sharing, paying Zakah, prohibition of interest, monopoly and other forms of unethical trade and transaction such as dealing with pork, alcohol and gambling. Hence, Islamic banking method of financing and or products structure is based on the tract to redress the inherent injustice tied with interest based dealing.
