Financial Distress in Local Banks in Kenya, Nigeria, Uganda and Zambia: Causes and Implications for Regulatory Policy

Brownbridge, Martin

doi:10.1111/1467-7679.00057

Cited by 43 publications

(26 citation statements)

References 7 publications

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“…In some countries, legislation was not strict or comprehensive enough to deal with problems that emerged in the 1990s. For example, the minimum capital requirements in the legislation enacted by several countries in SSA were set at levels that allowed many undercapitalised banks, lacking adequate financial or managerial resources, to be set up in the 1990s, which subsequently failed as a result of mismanagement and fraud [Brownbridge (1998)].…”

Section: Weaknesses In Prudential Systemsmentioning

confidence: 99%

Financial Development, Economic Growth, and Poverty Reduction (The Mahbub ul Haq Memorial Lecture)

Kirkpatrick

2000

PDR

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The frequent failure of financial liberalisation efforts in developing countries, and the serious damage which recent financial crises have imposed on these economies, have led to renewed attempts to understand the relationships between financial sector development, economic growth and poverty reduction, and to provide a more robust intellectual foundation on which to design efficient and pro-poor financial sector policies for developing countries. The paper examines the contribution that financial sector development can make to poverty reduction in developing countries. The linkages between financial and economic growth, and between economic growth and poverty reduction, are considered, and some preliminary empirical evidence is presented on these linkages. The paper goes on to argue that financial market imperfections are a key constraint on pro-poor growth, and that public policy directed at the correction of these financial market failures is needed to ensure that financial development contributes effectively to growth and poverty reduction. The final part of the paper examines in some detail the role of financial regulation and supervision policy as a key area for public intervention directed at enhancing the financial sector’s contribution to poverty reduction.

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Section: Weaknesses In Prudential Systemsmentioning

confidence: 99%

Financial Development, Economic Growth, and Poverty Reduction (The Mahbub ul Haq Memorial Lecture)

Kirkpatrick

2000

PDR

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“…A huge amount of non-performing loans can influence the intermediary role of banks for the progress of the economy and nation. Research practices show that non-performing loans are top indicators of financial crises (Brownbridge, 1998;Greenidge & Grosvenor, 2010), however, poor and inefficient management and inefficiency of firms are also vital factors for non-performing loans (Fan & Shaffer, 2004;Girardone, Molyneux & Gardener, 2004). Failure to repay the debts causes the emergence of non-performing loans, which is the greatest financial problem (Heffernan, 2005).…”

Section: Introductionmentioning

confidence: 99%

Macroeconomic and Idiosyncratic Factors of Non-Performing Loans: Evidence from Pakistan’s Banking Sector

Ashraf

Butt

2019

J. financ. account. res.

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Using panel data approach in the Pakistan banking sector over the period 2010 to 2016, we examine the bank-specific and macroeconomic determinants of non-performing loans. We use quantitative research design with OLS random effect model. Furthermore, we use various regression and correlation analysis in this study. We find that rise in capital adequacy ratio, bank size, GDP growth rate, and inflation, reduces the non-performing loans (NPL) ratio. Our results also show that a rise in loan loss provisions enhances the NPL ratio. Our results suggest that banks with poor asset-quality can sabotage the growth of fiscal as well as the economic sector. Outcomes of the study emphasis on the need to clear-out the NPLs to keep financial sector sound. NPLs can cause high loan loss provisions which affect the capitalization of banks that ultimately impacts fiscal and economic growth. Bank supervisory agencies should therefore pay attention to monitory and macroeconomic policies of the banks. This study examines the impact of idiosyncratic and macroeconomic determinants of non-performing loans on banks’ asset quality using recent data from 2010 to 2016, the time period when major banking sector reforms were launched.

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“…We refer such times as the crisis times. Most of the time, banking crisis are associated with NPLs in the related literature (Brownbridge, 1998;Demirguc-Kunt & Detragiache, 1998;González-Hermosillo, 1999;Yang, 2003) and local economic conditions explain the variation in NPL (Keeton & Morris, 1987). That is the reason that a strand of the NPL literature developed to analyze the association between financial crisis and NPLs and determinants of NPLs.…”

Section: Introductionmentioning

confidence: 99%

Macroeconomic Determinants of Non-Performing Loans: Case of Turkey and Saudi Arabia

Polat

2018

isarder

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Non Performing loans (NPLs) are important variables on a macro scale for the financial stability of the country as well as microscale for banks profitability itself. Since 2008 global crisis, NPLs are monitored worldwide and became systemically important. In this research, by using a data set between 2000-2016, the macroeconomic determinants of NPLs have been investigated for Turkey and Saudi Arabia. By using NPL ratio as the dependent variable and estimating through beta regression analysis, it is found that market capitalization and inflation variables are pozitively related with NPL for Turkey while GDP, inflation, debt, market capitalization and money supply have positively related with NPL for Saudi Arabia and unemployment and transparencey variables are negatively related with NPL for Saudi Arabia . It has been found that the NPL ratios are well explained by some macroeconomic variables. Countries with different macroeconomic conditions have different determinants of NPLs

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Financial Distress in Local Banks in Kenya, Nigeria, Uganda and Zambia: Causes and Implications for Regulatory Policy

Cited by 43 publications

References 7 publications

Financial Development, Economic Growth, and Poverty Reduction (The Mahbub ul Haq Memorial Lecture)

Financial Development, Economic Growth, and Poverty Reduction (The Mahbub ul Haq Memorial Lecture)

Macroeconomic and Idiosyncratic Factors of Non-Performing Loans: Evidence from Pakistan’s Banking Sector

Macroeconomic Determinants of Non-Performing Loans: Case of Turkey and Saudi Arabia

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