IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-05060821.html
   My bibliography  Save this paper

The Effect of Non-Performing Loans on Credit Availability: Insight from the Moroccan Banking System

Author

Listed:
  • Zakaria Savon

    (Faculty of Legal, Economic and Social Sciences- Souissi Mohamed V University of Rabat, Morocco)

Abstract

In recent years, Morocco has witnessed a notable and troubling increase in non-performing loans (NPLs). Data from Bank Al-Maghrib, the central bank of Morocco, reveals that nonperforming loans accounted for over 8% of the total credit volume in 2022.These loans present significant challenges, not only for the resilience of the banking sector but also because they can result in tighter credit conditions, making it increasingly difficult for businesses and consumers to obtain financing. This study conducts a comprehensive analysis of the impact of non-performing loans on credit supply within the Moroccan banking system, covering the period from the first quarter of 2009 to the fourth quarter of 2022. Findings from the ARDL model indicate that the rate of non-performing loans substantially impedes credit availability, both in the short term and the long term. This underscores the critical relationship between financial stability and economic stability.

Suggested Citation

  • Zakaria Savon, 2025. "The Effect of Non-Performing Loans on Credit Availability: Insight from the Moroccan Banking System," Post-Print hal-05060821, HAL.
    • Handle: RePEc:hal:journl:hal-05060821
    Note: View the original document on HAL open archive server: https://hal.science/hal-05060821v1
    as

    Download full text from publisher

    File URL: https://hal.science/hal-05060821v1/document
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    2. Matteo Accornero & Piergiorgio Alessandri & Luisa Carpinelli & Alberto Maria Sorrentino, 2017. "Non-performing loans and the supply of bank credit: evidence from Italy," Questioni di Economia e Finanza (Occasional Papers) 374, Bank of Italy, Economic Research and International Relations Area.
    3. Ivan Huljak & Reiner Martin & Diego Moccero & Cosimo Pancaro, 2022. "Do non-performing loans matter for bank lending and the business cycle in euro area countries?," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 1050-1080, December.
    4. Maja Ivanović, 2016. "Determinants of Credit Growth: The Case of Montenegro," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 5(2), pages 101-118.
    5. Almir ALIHODŽIĆ & İbrahim Halil EKŞİ, 2018. "Credit growth and non-performing loans: evidence from Turkey and some Balkan countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 229-249, December.
    6. Cep Jandi Anwar & Indra Suhendra & Saharuddin Didu & Anggi Sayektiyani & Lilis Nur Kholishoh, 2023. "The impact of monetary policy and credit risk on bank credit behavior: An analysis of banks listed on the Indonesian stock exchange," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(1), pages 2220250-222, December.
    7. Ahmad Rado Rizkullah & Suhel & Sri Andaiyani, 2023. "Determinants of Credit Growth: An Empirical Study of Commercial Banks in Indonesia," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(2), pages 404-424.
    8. Winifred Huang & Philip Molyneux & Steven Ongena & Ru Xie, 2023. "The new challenges of global banking and finance," The European Journal of Finance, Taylor & Francis Journals, vol. 29(7), pages 693-699, May.
    9. Sánchez Serrano, Antonio, 2021. "The impact of non-performing loans on bank lending in Europe: An empirical analysis," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Susamto, Akhmad Akbar & Octavio, Danes Quirira & Risfandy, Tastaftiyan & Wardani, Dyah Titis Kusuma, 2023. "Public ownership and local bank lending at the time of the Covid-19 pandemic: Evidence from Indonesia," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    2. Ahmad Rado Rizkullah & Suhel & Sri Andaiyani, 2023. "Determinants of Credit Growth: An Empirical Study of Commercial Banks in Indonesia," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(2), pages 404-424.
    3. Almir ALIHODŽIĆ & İbrahim Halil EKŞİ, 2018. "Credit growth and non-performing loans: evidence from Turkey and some Balkan countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 229-249, December.
    4. Haddou, Samira, 2022. "International financial stress spillovers to bank lending: Do internal characteristics matter?," International Review of Financial Analysis, Elsevier, vol. 83(C).
    5. Nicoletti, Giulio & Rariga, Judit & Rodriguez d’Acri, Costanza, 2024. "Spare tyres with a hole: investment funds under stress and credit to firms," Working Paper Series 2917, European Central Bank.
    6. Karasoy, Alper, 2022. "Is innovative technology a solution to Japan's long-run energy insecurity? Dynamic evidence from the linear and nonlinear methods," Technology in Society, Elsevier, vol. 70(C).
    7. Bruce Morley, 2009. "A Comparison of Two Alternative Monetary Approaches to Exchange Rate Determination over the Long-Run," International Econometric Review (IER), Econometric Research Association, vol. 1(2), pages 63-76, April.
    8. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2015. "Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution," Economic Modelling, Elsevier, vol. 44(C), pages 104-115.
    9. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    10. Finaldi Russo, Paolo & Nigro, Valentina & Pastorelli, Sabrina, 2024. "Bank lending to small firms: Metamorphosis of a financing model," International Review of Economics & Finance, Elsevier, vol. 90(C), pages 13-31.
    11. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    12. Temesvary, Judit & Wei, Andrew, 2024. "Domestic lending and the pandemic: How does banks’ exposure to COVID-19 abroad affect their lending in the United States?," Journal of International Money and Finance, Elsevier, vol. 143(C).
    13. Noraida, A.W. & Abdul-Rahim, A.S. & Othman, Mohd, 2017. "The Impact of Sustainable Forest Management (SFM) Practices on Primary Timber-Based Production in Peninsular Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 51(2), pages 143-154.
    14. Georgios Bertsatos & Plutarchos Sakellaris & Mike G. Tsionas, 2022. "Extensions of the Pesaran, Shin and Smith (2001) bounds testing procedure," Empirical Economics, Springer, vol. 62(2), pages 605-634, February.
    15. Md.Yousuf & Raju Ahmed & Nasrin Akther Lubna & Shah Md. Sumon, 2019. "Estimating the Services Sector Impact on Economic Growth of Bangladesh: An Econometric Investigation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(2), pages 62-72, June.
    16. Nasreen, Samia & Anwar, Sofia & Ozturk, Ilhan, 2017. "Financial stability, energy consumption and environmental quality: Evidence from South Asian economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1105-1122.
    17. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    18. Shuyang Chen, 2021. "The Urbanisation Impacts on the Policy Effects of the Carbon Tax in China," Sustainability, MDPI, vol. 13(12), pages 1-11, June.
    19. Boukraine, Wissem, 2020. "The finance-inequality nexus in the BRICS countries: evidence from an ARDL bound testing approach," MPRA Paper 101976, University Library of Munich, Germany.
    20. Garrod Brian & Almeida António & Machado Luiz, 2023. "Modelling of nonlinear asymmetric effects of changes in tourism on economic growth in an autonomous small-island economy," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 13(2), pages 154-172, December.

    More about this item

    Keywords

    Non-performing loans; Credit supply; Moroccan banking system; ARDL;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hal:journl:hal-05060821. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.