Non-Performing Loans and Key Macroeconomic Variables’ Nexus in Nigeria

• Post by: deqe
• August 5, 2022
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From a practical standpoint, non-performing loans are one of the big challenges for the banking sector even in Nigeria. This paper investigated this serious challenge by developing the nexus between non-performing loans and key macroeconomic indicators. Upon this backdrop, the data of Economic indicators (Interest Rates, Inflation and Gross Domestic Product) and Non-performing Loans are employed for the time span of 2016-2020 on a quarterly basis. By applying the Gaussian regression, the result revealed that a positive relationship exists between the interest rate, inflation rate and non-performing loans. However, there is a negative relationship between gross domestic product and non-performing Loans hence, non-performing loans negatively affect economic growth.

Keywords: Non-Performing Loans; Macroeconomic Variables; Nigeria

Authorship: Egiyi, M. A. PhD | FULL PDF