This study is attempted to examine factors affecting non -performing loan of development bank of Ethiopia. The main objective is to examine the factors affecting nonperforming loans in DBE central region. After problem identification, research hypothesis was developed which inquires the relationship and effect of non-performing loans on development bank of Ethiopia. Both secondary and primary data were used in the research. The data is then analyzed using descriptive, correlation and regression techniques through SPSS and Stata software program.
The findings of the study revealed that gross domestic product has a positive impact on the occurrence of non-performing loans while other model variables unemployment, inflation rate and exchange rate have no impact on the occurrence of non-performing loan in which negatively affect non-performing loan. according to my study result. Also the result of the primary data indicated that in regarding about customer's specific causes, the result showed that credit culture of customers, lack of business knowledge, delayed approval, profit of the business, business location were determinants of non-performing loan while bank specific factors include poor credit assessment, poor customer selection, aggressive lending policy, borrowers culture, credit size affected non-performing loan.
Inhaltsverzeichnis (Table of Contents)
- 1 Background of the organization
- 1.1 Background of the study
- 1.2 Statement of the problem
- 1.3 Research objectives
- 1.3.1 General objective
- 1.3.2 Specific Objectives
- 1.4 Research questions
- 1.6 Significance of the study
- 1.7 Scope of the study
- 1.8 Limitations of the Study
- 1.9 Organization of the paper
- 2 Literature review
- 2.1 Introduction
- 2.2 Theoretical review
- 2.2.1 Financial Intermediation Theory
- 2.2.2 Information Asymmetry Theory
- 2.2.3 The Theory of Delegated Monitoring of Borrowers
- 2.2.4 Credit Assessment
- 2.2.5 Bank risks
- 2.2.6 Credit Risk Management
- 2.2.7 Meaning of Non-Performing Loans
- 2.3 Strategies for recovery of non-performing loans
- 2.4 Literature from various scholars
- 2.5 Empirical Literature Review
- 2.5.1 Empirical Studies in Ethiopia
- 2.5.2 Conceptual framework model
- 3 Research Methodology
- 3.1 Study area
- 3.2 Research design
- 3.3 Population
- 3.4 Sampling techniques
- 3.5 Data Collection Methods
- 3.6 Data analysis and presentation
- 4 Data
- 4.1 Introduction
- 4.2 Bank Specific Factors
- 4.3 Borrowers specific factors
- 5 Summary, Conclusion and Recommendation
- 5.1 Summary and Conclusion
- 5.1.1 descriptive summary
- 5.1.2 inferential summary
- 5.2 Recommendations
- 5.3 Recommendations for further studies
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis aims to examine the factors affecting non-performing loans (NPLs) at the Development Bank of Ethiopia (DBE) in the central region. The study uses both primary and secondary data analyzed through descriptive, correlation, and regression techniques. The main objective is to identify and analyze the key determinants influencing NPLs within the DBE.
- Factors influencing non-performing loans in the Ethiopian banking sector.
- The impact of macroeconomic variables (e.g., GDP, unemployment, inflation) on NPLs.
- The role of bank-specific factors (e.g., credit assessment, lending policies) in NPLs.
- The influence of borrower-specific factors (e.g., credit culture, business knowledge) on NPLs.
- Strategies for mitigating and recovering non-performing loans.
Zusammenfassung der Kapitel (Chapter Summaries)
1 Background of the organization: This chapter sets the stage for the research by providing context on the Development Bank of Ethiopia and the problem of non-performing loans within the Ethiopian banking system. It introduces the research problem, objectives, and questions guiding the study. The chapter establishes the significance of the research within the broader context of Ethiopian economic development and the banking sector's stability. It defines the scope and limitations of the study, outlining its geographical and temporal boundaries, and acknowledging any constraints on data access or methodology. The chapter concludes by outlining the structure of the thesis, guiding the reader through the subsequent chapters.
2 Literature review: This chapter reviews existing literature on non-performing loans, exploring various theoretical frameworks such as financial intermediation theory, information asymmetry theory, and the theory of delegated monitoring. It analyzes different credit assessment methods and credit risk management strategies. The review incorporates empirical studies from Ethiopia and elsewhere, providing a context for the current research. The chapter also establishes a conceptual framework that guides the empirical analysis in subsequent chapters. This includes a detailed analysis of various theoretical underpinnings which form the basis for hypotheses and model formulation in later sections.
3 Research Methodology: This chapter details the research design, including the study area, population, sampling techniques, data collection methods (both primary and secondary data sources are discussed), and the statistical methods used for data analysis. The choice of specific statistical techniques such as descriptive statistics, correlation analysis, and regression analysis, are justified in terms of their appropriateness for the research questions and data characteristics. The chapter addresses the validity and reliability of the data and methods employed, ensuring the scientific rigor of the study. Specific details are provided on the target sample population, the sampling procedure utilized and the rationalization for the chosen methodology.
4 Data: This chapter presents the collected data, categorizing it into bank-specific factors and borrower-specific factors influencing non-performing loans. This section likely involves presenting descriptive statistics, possibly including tables and graphs illustrating the distribution of key variables. It describes the characteristics of the data, providing a quantitative overview of the variables to be analyzed further. The data presented here lays the foundation for the subsequent analysis and interpretation in the results section.
Schlüsselwörter (Keywords)
Non-performing loans, Development Bank of Ethiopia, credit risk, macroeconomic factors, bank-specific factors, borrower-specific factors, credit assessment, lending policies, Ethiopian banking sector, NPLs, regression analysis, financial intermediation, information asymmetry.
Frequently Asked Questions: Analysis of Non-Performing Loans at the Development Bank of Ethiopia
What is the overall purpose of this document?
This document provides a comprehensive preview of a thesis examining the factors affecting non-performing loans (NPLs) at the Development Bank of Ethiopia (DBE). It includes a table of contents, objectives and key themes, chapter summaries, and keywords, offering a structured overview of the research.
What are the main objectives of the research?
The main objective is to identify and analyze the key determinants influencing NPLs within the DBE. This includes examining factors influencing NPLs in the Ethiopian banking sector, the impact of macroeconomic variables, the role of bank-specific factors (credit assessment, lending policies), the influence of borrower-specific factors (credit culture, business knowledge), and strategies for mitigating and recovering NPLs.
What is the structure of the thesis?
The thesis is structured into five chapters. Chapter 1 provides background information, the research problem, objectives, and significance. Chapter 2 reviews relevant literature, including theoretical frameworks and empirical studies. Chapter 3 details the research methodology, including the study area, data collection, and analysis techniques. Chapter 4 presents the collected data, categorized into bank-specific and borrower-specific factors. Finally, Chapter 5 summarizes the findings, offers conclusions, and provides recommendations for further research.
What theoretical frameworks are used in this research?
The research draws upon several theoretical frameworks, including financial intermediation theory, information asymmetry theory, and the theory of delegated monitoring to understand the causes and consequences of NPLs.
What data collection methods were employed?
Both primary and secondary data sources were utilized. The specific methods for collecting primary data are not detailed in this preview, but the methodology chapter of the complete thesis will explain these in full.
What data analysis techniques are used?
The research employs descriptive statistics, correlation analysis, and regression analysis to analyze the collected data and test hypotheses related to NPLs.
What are some key factors investigated in relation to NPLs?
The study investigates both macroeconomic factors (e.g., GDP, unemployment, inflation), bank-specific factors (e.g., credit assessment practices, lending policies), and borrower-specific factors (e.g., credit culture, business knowledge) that contribute to NPLs.
What is the significance of this research?
This research is significant for understanding the challenges faced by the Ethiopian banking sector and for developing effective strategies to manage and mitigate NPLs. It contributes to the stability of the Ethiopian banking sector and overall economic development.
What are the key findings (as previewed)?
The specific key findings are not detailed in this preview but are presented in chapter 5 of the complete thesis. This preview offers a framework of the study, including a detailed table of contents, objectives, and chapter summaries.
What are the keywords associated with this research?
Keywords include: Non-performing loans, Development Bank of Ethiopia, credit risk, macroeconomic factors, bank-specific factors, borrower-specific factors, credit assessment, lending policies, Ethiopian banking sector, NPLs, regression analysis, financial intermediation, and information asymmetry.
- Citar trabajo
- Mequanint Zeleke (Autor), 2018, Factors Affecting Non-Performing Loan in the Case of the Development Bank of Ethiopia, Múnich, GRIN Verlag, https://www.grin.com/document/515299