An analysis of relationship between non-performing loan and its determinants focusing commercial banks in Malaysia / Nur Syeda Mazlan

As we know that non- performing loans (NPLs) always happen in our country and become more serious. A non-performing loan (NPL) may be defined as a loan that has been unpaid for ninety days or more. There are too many reason why it happens and most banking institution find alternative strategy on how to handle this problem. A study show that non performing loans are increase year to year and this situation were disquiet. The objective of this paper is to investigate the relationship between nonperforming loans in Malaysia and the various factor by using data from year 2004 to 2009, which is include 72 month. The data gathered is to prove whether increase in real interest rate, inflation rate, real exchange rate and GDP growth will increased in non- performing loans or not.