Abstract
NPLs in Tunisia are increasing at an alarming rate every year; therefore, the main objective of the present study is to investigate the specific factors explaining the increase of NPL level in the bank. The current study used 10 years panel data (2010-2020), using a PMG-ARDL approach for a global panel consisting of 18 Tunisian banks to test the validity of banks specific hypotheses. The long-run PMG-ARDL estimates, suggest that Tunisian banks support the “bad management”, the “skimping” hypothesis, the “Bad management II” but reject the “bad luck” hypothesis. As a result, it's recommended that Tunisian banks should amend their policies regarding credit advancement to align them with the specific factors taken in this study. Besides, banks should improve credit monitoring to ensure the loaned-out funds are intended for the intended purpose. This would ensure economic sustainability.
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Article Details
- Year: 2023
- Volume: 44
- Issue: 3
- Pages: 129 - 152
- Accepted: 10.01.2023
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DOI:
https://doi.org/10.5281/zenodo.16909900 -
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How to Cite?
Ben Amor Atiyet (2023). Explanatory Factors of Non-Performing Loans in Tunisian Banks: Evidence from Panel ARDL/PMG Approach. Journal of Economic Cooperation and Development, 44(3), 129-152. https://doi.org/10.5281/zenodo.16909900
