TIGIST AYELE2025-06-262025-08https://rps.wku.edu.et/handle/123456789/46393Loan becomes nonperforming when it cannot be recovered within certain stipulated time that is governed by some respective principle of loan. The objective of this study is to assess the nonperforming loans of commercial bank of Ethiopia, Nifasilk district. The researcher used mixed approach which means, both qualitative and quantitative research approach to gather relevant data from the concerned body and also the researcher applied descriptive method of the research design because the method used to describe the state of the nature of NPLs in detail. A primary method of data collection is applied. The primary data is collected through questionnaire from the customers and employees of the bank and interview to the loan manager of the bank. The researcher used both convenience sampling technique and calculations used in statics to accumulate a desire data about the non-performing loans of the bank. The collected data were systematically organized and analyzed using tabular representations and descriptive analysis methods to provide a detailed examination of key issues. The study‘s findings revealed several critical challenges: ineffective asset management, uncontrolled business expansion and diversification, and excessive financing to borrowers. Based on these results, the study recommends that the bank establish clear credit assessment policies and procedures while providing comprehensive guidance to new applicants on asset management practices and overall banking regulations.enThesis