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Determinants of Bank Credit Risk in Developing Economies: Evidence from Benin

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  • Kevin Ghislain Adjé

Abstract

Our study mainly focuses on the determinants of credit risk of Beninese banks. Theoretical and empirical literature teach us that both external and internal factors are the determinants of credit risk. From a sample of seven (07) commercial banks (only one of which is listed on the BRVM), we tested the simultaneous effect of external and internal factors on credit risk over the period 2004-2013. After an econometric analysis on panel data (fixed effect model estimated by the PCSE method), it appears that the "growth of GDP", "credit by signature", "interest margin" and the "proportion of institutional administrator "are the determinants of credit risk. Therefore, political authorities and bank officials could improve credit risk management by issuing policies on these factors.

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  • Kevin Ghislain Adjé, 2018. "Determinants of Bank Credit Risk in Developing Economies: Evidence from Benin," International Business Research, Canadian Center of Science and Education, vol. 11(4), pages 154-163, April.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:4:p:154-163
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    More about this item

    Keywords

    balanced panel; bank governance; benin; credit risk; determinant;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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