This study examined the bank-specific and macro-economic determinants of Non-performing
loans (NPLs) of Ethiopian commercial banks. The study adopted a quantitative research
approach. The study uses data collected from the National Bank of Ethiopia, Central Statistical
Agency and financial statement of nine commercial banks. Data covers the period from 2007-
2016. Descriptive and multiple regression analysis employed to analyze the unbalanced panel
data. For the purpose of this study seven variables have been taken, categorized under bank
specific factor and macro-economic factor .Under bank specific factor there are five variables
.These variables are; net interest margin, capital adequacy, return on asset, loan to deposit ratio
and return on equity. And macro-economic factors are Gross domestic product and inflation rate
