DETERMINANTS OF NON-PERFORMING LOANS: EVIDENCE FROM PRIVATE COMMERCIAL BANKS IN ETHIOPIA (IN CASE OF AIB, DB, BOA, NIB, CBO, WB, LIB AND UB)

Abstract

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