Influence of Macroeconomic Factors in Failure of Return of Bank Loans in Kosovo

Abstract

The risk from non-payment of loans is a challenge for all the banks. Payment of the loans is a crucial issue for efficient functioning of the banking system. Loaning is one of the main uncertainties in the banking business, for loan payment can be rarely guaranteed completely. Often, a question occurs: what are the factors that influence in failure of the return of bank loan? What are the politics that must be followed to stimulate the return of bank loans? Through this research we aim to highlight the reasons of debtors in failing of loan return by studying the link of macroeconomic factors with NPL (non-performing loans). This is a first research in Kosovo that analyses the link of the macroeconomic factors influence (GDP, interest norms, unemployment, inflation, maturity period and grace period) these referred in the research as “independent variables” in failure of bank loan return that in the study bellow are referred as “dependent variable NPL for the Kosovo bank sector. This study argues as what is needed for the Kosovo banking system and presents the ideas of sustainable development of banking system in correspondence with non-performing loans, acknowledgment of the factors that hinder the return of the bank loans and reorientation of the loaning politics.