“Assessing the factors influencing the performance of loans of Commercial Banks in Ghana” Case study of HFC Bank
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Date
MAY, 2016.
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Abstract
This study assessed the factors that influence loan performance of commercial banks in Ghana using HFC as a case study. The sample period used for the study was based on a quarterly data from 2008 to 2015. Two separate models were used to determine the effects of banks’ specific factors and macroeconomic variables on loan performance. Using the ARDL bounds test of co-integration as an estimation technique, the results showed evidence of long run relationship among the variables. The results suggest that macroeconomic factors that influence loan performance are inflation and T-bill whiles banks’ specific factors are, bank’s loan interest rate, loan to asset ratio and banks loan loss provision over reserve. These therefore show that macroeconomic instabilities and banks specific factors do have significant impact on loan performance. Hence there is the need for bank management and policy makers to undertake policies that can ensure efficiency in banks loan performance.
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Thesis submitted to the Department of Economics of the College of Social Sciences and Humanities, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirement for award of Master of Science degree in Economics.