James Daniel Chindengwike
Assistant Lecturer, St. John's University of Tanzania, Dodoma, Tanzania

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Nexus between Non-Performance Loans and Financial Performance of Commercial Banks Listed at Dse, Tanzania: Ardl Approach James Daniel Chindengwike
Journal of Corporate Finance Management and Banking System ( JCFMBS) ISSN : 2799-1059 Vol. 2 No. 02 (2022): Feb-Mar 2022
Publisher : HM Journals

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.55529/jcfmbs.22.39.49

Abstract

Management of credit risk is serious to the financial viability of commercial banks in both developing and developed countries. Non-performing loans (NPLS) are proxies for credit risk. The study investigated the association between NPLs and the financial performance of Tanzanian commercial banks. The study used a causal research design, with study participants NMB, CRDB MKOMBOZI, MAENDELEO, and DCB recruited by a purposeful selection approach. The research was based on secondary data received from the DSE between 2013 and 2020. Making use of a template collection. Descriptive statistics, a correlation matrix for a link, bound cointegration for a long-run relationship, the granger causal test for a causal association, and an error correction model were employed in the study. According to the study's findings, there is a significant negative relationship between financial performance and NPLs. It. The investigation found that there is a long-run relationship between the factors under consideration and financial performance. Furthermore, a one-way association was established between NPLs and the financial performance of CRDB NMB, MAENDELEO, DCB and MKOMBOZI, the survey found that commercial banks listed on the DSE had a low rate of NPLs. While the issue was interesting, close is an essential to do a complete examination of all Tanzanian banks.