IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/v15y2024i1id17398.html

Determinants of Non-Performing Loans in Cyprus: An Empirical Analysis of Macroeconomic and Borrower-Specific Factors

Author

Listed:
  • Christodoulou-Volos, Christos

    (Department of Economics and Business, Neapolis University, Pafos, Cyprus)

Abstract

This study empirically investigates the determinants of non-performing loans (NPLs) within the Cypriot banking sector by employing Pearson's correlation analysis and Generalized Method of Moments (GMM) estimations. Utilizing a sample of 200 NPLs granted to individuals by a Cypriot banking institution from 2013 to 2019, the study examines both macroeconomic and borrower-specific factors influencing NPLs. The findings reveal significant associations between borrower profile characteristics - such as gender, age, education level, professional and financial standing, and place of residence - and loan-specific details, including loan purpose, type of collateral, and NPL status and rescheduling. The study also identifies that lower economic growth, higher inflation, and higher interest rates correlate with an increase in NPLs. Moreover, borrower-specific variables like return on assets and loan growth significantly affect NPL levels. These results offer valuable insights into management in taking corrective actions and have important policy implications for regulatory authorities in formulating effective economic policies. Additionally, the study guides potential investors by highlighting key risk factors associated with NPLs in Cyprus.

Suggested Citation

  • Christodoulou-Volos, Christos, 2024. "Determinants of Non-Performing Loans in Cyprus: An Empirical Analysis of Macroeconomic and Borrower-Specific Factors," International Journal of Economics and Financial Issues, Econjournals, vol. 15(1), pages 190-201, December.
    • Handle: RePEc:eco:journ1:v:15:y:2024:i:1:id:17398
    DOI: 10.32479/ijefi.17398
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijefi/article/download/17398/8453
    Download Restriction: no
    File URL: https://libkey.io/10.32479/ijefi.17398?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:v:15:y:2024:i:1:id:17398. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijefi .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.