Impact of Credit Management on Non-Performing Loans in Nigerian Commercial Banks
Abstract
Abstract
Banks occupy vital position in every economy which enhances growth. In spite of this, there exist corporate governance failure in banks that results largely from customers sophistication and non-performing loan. The study examines credit management and non-performing loans of commercial banks in Nigeria. Ordered probit regression was used test the impact of bank specific control measures on non-performing loans in Nigerian commercial banks and vector autoregressive model was employed to examine the impact of macro-economic variables on non-performing loans in Nigerian commercial banks. The result of the regression analysis revealed that monitoring of loans usage by borrowers has significant impact on non-performing loans at 10% level of significance. The study concluded that bank specific control measures have significant impact on non-performing loans in Nigerian commercial banks. Banks should therefore ensure that credit officers perform periodic follow-ups on borrowers to ensure that loans are used for intended purposes to reduce the incidence of non - performing loans.
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