Determinants of loan loss provision of non-bank financial institution in Malaysia / Nursarra Naquiya Shamshir

This paper aimed at finding on the determinants of loan loss provision on non-bank financial institution in Malaysia. Total loan is considered as the dependent variable in this study. The independent variables in this project consist of non-performing loans, interest income , loans and advances and net profit. The sample of the study comprises of 35 observations each of the independent variables and dependent variables on a yearly basis from 2012 to 2018. The methodology used for this research by using Multiple Linear Regression with the panel data. Besides, interactive software package E-view would be used for testing and analyzing the data collected. The study is an attempt to investigate the relationship of the chosen independent variables towards impacting loan loss provisions. The outcomes of this research paper would provide with an indicative view and could form an important basis for debtor and creditor in the strategies and the decisions respectively.

The main results of the findings using the 5% of significance level, it had stated that non-performing loans and loans and advances have the correlation with the loan loss provisions. The other two variables which are interest income and net profit have the results which were greater than the 5% significance level, and it may have no relationship with the loan loss provisions and may resulted they it has failed to reject the null hypothesis.