| Title : | Determinants of lending in Nepalese commercial banks | | Material Type: | printed text | | Authors: | Rekha Acharya, Author | | Publication Date: | 2017 | | Pagination: | 109p. | | Size: | GRP/Thesis | | Accompanying material: | 8/B | | Languages : | English | | Descriptors: | Lending
| | Class number: | 346.730 | | Abstract: | Lending which may be on short, medium or long-term basis is one of the main services that the banks provide to their customers. Bank lending plays one of the most important functions in accessing credit to different sectors of the economy. As a financial intermediary, bank accepts deposits from the public and creates credit.Lending activities of various commercial banks depend on the willingness to extend credit to different sectors of the economy. Thus, lending activities of banks help to achieve economic growth.Nwankwo (2000) stated that credit is the largest single income-earning asset in the portfolio of most commercial banks.The success of lending activities to a great extent lies on the part of the credit analysts to carry out good credit analysis, presentations, structuring and reporting.
This study attempts to examine the determinants of lending in Nepalese commercial banks. The study is based on secondary data of 21 commercial banks with 147 observations for the period of 2008/09 to 2014/15. Data and information have been collected from Banking and Financial Statistics and Bank Supervision published by NRB and annual reports of the selected commercial banks.The research design adopted in this study is descriptive and causal comparative research design.
The result shows that average loans and advance is highest forNIB (Rs.24.54 billion) and lowest for LBL (Rs.22.82 billion). The average TL/TA is highest forPCB (69.87 percent) and lowest for SCBL (42.63 percent). The average bank size is highest for ADB (Rs.83.97 billion) and lowest for LBL (Rs.13.53 billion). The average cash reserve ratio is highest for NBBL (5.04 percent) and lowest for MBL (0.71 percent). The average dividend yield is highest for NICA (30.91 percent) and lowest for HBL (7.30 percent). The average liquidity ratio is highest for SCBL (39.03 percent) and lowest for SBI (17.33 percent). The average deposit is highest for NABL(Rs.61.66) and lowest for LBL (Rs.10.72). The average non-performing loan is highest for NBBL (7.20 percent) and lowest for EBL (0.53 percent). The average lending rate is highest for ADB (11.95 percent) and lowest for SCBL (6.89 percent).Inflation is highest in the year 2013 (9.90 percent) and lowest in the year 2015 (7.20 percent). Gross domestic product is highest in the year 2013 (5.40 percent) and lowest in the year 2015 (3.4 percent).
The descriptive statistics for selected commercial bank shows that the average loans and advance, total loans to total assets, bank size, cash reserve ratio, liquidity ratio, deposit, non-performing loan, lending rate, gross domestic product and inflation are Rs. 23.72 billion, 62.12 percent,Rs.42.43 billion, 15.01 percent, 26.46 percent, Rs. 33.88 billion, 2.25 percent, 9.91 percent, 4.40 percent and 8.77 respectively.
The correlation matrix shows that bank size and deposits have positive relationship with loans and advance, while cash reserve ratio, non-performing loan and lending rate have negative relationship with loans and advance. On the other hand, TL/TA is negatively related to bank size, cash reserve ratio, liquidity ratio, deposit, non-performing loan and gross domestic product whereas the TL/TA is positively correlated to lending rate and inflation.
The regression analysis reveals that beta coefficients are positive and significant for bank size and deposits with LA whereas lending rate and gross domestic product is negatively significant with LA. The beta coefficient for bank size, deposits and lending rate are significant at 1 percent level of significance whereas gross domestic product is significant at 5 percent level of significance with LA. On the other hand, the beta coefficients are negative and significant for bank size, liquidity ratio, deposits, and non-performing loan whereas, the beta coefficient is positive and significant for lending rate.
|
Determinants of lending in Nepalese commercial banks [printed text] / Rekha Acharya, Author . - 2017 . - 109p. ; GRP/Thesis + 8/B. Languages : English | Descriptors: | Lending
| | Class number: | 346.730 | | Abstract: | Lending which may be on short, medium or long-term basis is one of the main services that the banks provide to their customers. Bank lending plays one of the most important functions in accessing credit to different sectors of the economy. As a financial intermediary, bank accepts deposits from the public and creates credit.Lending activities of various commercial banks depend on the willingness to extend credit to different sectors of the economy. Thus, lending activities of banks help to achieve economic growth.Nwankwo (2000) stated that credit is the largest single income-earning asset in the portfolio of most commercial banks.The success of lending activities to a great extent lies on the part of the credit analysts to carry out good credit analysis, presentations, structuring and reporting.
This study attempts to examine the determinants of lending in Nepalese commercial banks. The study is based on secondary data of 21 commercial banks with 147 observations for the period of 2008/09 to 2014/15. Data and information have been collected from Banking and Financial Statistics and Bank Supervision published by NRB and annual reports of the selected commercial banks.The research design adopted in this study is descriptive and causal comparative research design.
The result shows that average loans and advance is highest forNIB (Rs.24.54 billion) and lowest for LBL (Rs.22.82 billion). The average TL/TA is highest forPCB (69.87 percent) and lowest for SCBL (42.63 percent). The average bank size is highest for ADB (Rs.83.97 billion) and lowest for LBL (Rs.13.53 billion). The average cash reserve ratio is highest for NBBL (5.04 percent) and lowest for MBL (0.71 percent). The average dividend yield is highest for NICA (30.91 percent) and lowest for HBL (7.30 percent). The average liquidity ratio is highest for SCBL (39.03 percent) and lowest for SBI (17.33 percent). The average deposit is highest for NABL(Rs.61.66) and lowest for LBL (Rs.10.72). The average non-performing loan is highest for NBBL (7.20 percent) and lowest for EBL (0.53 percent). The average lending rate is highest for ADB (11.95 percent) and lowest for SCBL (6.89 percent).Inflation is highest in the year 2013 (9.90 percent) and lowest in the year 2015 (7.20 percent). Gross domestic product is highest in the year 2013 (5.40 percent) and lowest in the year 2015 (3.4 percent).
The descriptive statistics for selected commercial bank shows that the average loans and advance, total loans to total assets, bank size, cash reserve ratio, liquidity ratio, deposit, non-performing loan, lending rate, gross domestic product and inflation are Rs. 23.72 billion, 62.12 percent,Rs.42.43 billion, 15.01 percent, 26.46 percent, Rs. 33.88 billion, 2.25 percent, 9.91 percent, 4.40 percent and 8.77 respectively.
The correlation matrix shows that bank size and deposits have positive relationship with loans and advance, while cash reserve ratio, non-performing loan and lending rate have negative relationship with loans and advance. On the other hand, TL/TA is negatively related to bank size, cash reserve ratio, liquidity ratio, deposit, non-performing loan and gross domestic product whereas the TL/TA is positively correlated to lending rate and inflation.
The regression analysis reveals that beta coefficients are positive and significant for bank size and deposits with LA whereas lending rate and gross domestic product is negatively significant with LA. The beta coefficient for bank size, deposits and lending rate are significant at 1 percent level of significance whereas gross domestic product is significant at 5 percent level of significance with LA. On the other hand, the beta coefficients are negative and significant for bank size, liquidity ratio, deposits, and non-performing loan whereas, the beta coefficient is positive and significant for lending rate.
|
|
Refine your search Apply to external sourcesDeterminants of lending in Nepalese commercial banks / Rekha Acharya
