A study on factors contributing to the non-performing loan of hire purchase loan account portfolio for consumer's goods in Sabah Credit Corporation (SCC) / Hilda Tiwin Mojinun

"A loan is non-performing when payments of interest and principal are past due by 90 days or more, or at least 90 days of interest payments have been capitalized, refinanced or delayed by agreement, or payments are less than 90 days overdue, but there are other good reasons to doubt that payments will be made in full" (IMF) Non-Performing Loans (NPLs) are one of the indicators and factors in gauging the performance of financial institutions. In an accounting book, profits are taken-off to provide the amount of NPLs hence reducing the firm actual annual taking. Therefore, contenting the NPLs to an acceptable rate would be the utmost importance and avenue for a financial firm to improve its bottom-line. Why do accounts become non-performing? The answer to this million dollars question would be the most sought for by financial institutions. This is due to the fact that this problem takes a big portion of a firm's pie compare to its name. In contenting the NPLs, the firm concern needs to understand the actual factors contributing to loan account to become non-performing. In depth study is therefore necessary to effectively understand the correlation between anticipated contributing factors. This study would provide actual assessment on the problem the firm is facing. When the factors contributing to the problem in hand are known, only then measures in tackling the problem can be efficiently emplaced. Prudent decisions with regard to the problem can be made when sufficient inputs are available.