Factors Influencing the Recovery of Non-Performing Loans in Commercial Banks: The Case of Exim Bank

Abstract

This study aimed at evaluating different factors that influence the recovery of NPL by analyzing the management of NPL recovery in commercial banks in Tanzania. Using Exim Bank as the case study, the study evaluated NPL ratios, influence of internal management on recovery strategies, influence of third-party activities on NPL recovery and effects of regulatory guidelines on the recovery of NPL. SPSS was used to test the strength of the relationships between the study variables, using the Pearson Correlation Coefficient method. The study concluded that there is a negative strong relationship between NPL and net income, a positive strong relationship between internal management strategies and NPL recovery, a negative strong relationship between third-party recovery activities and NPL recovery and a positive strong relationship between the regulatory guidelines and NPL recovery.

Keywords: Non-performing Loans, Commercial Banks, Exim Bank Tanzania

DOI: 10.7176/EJBM/13-14-05

Publication date:July 31^st 2021