DETERMINANTS OF NON-PERFORMING LOAN IN COMMERCIAL BANKS: EVIDENCE IN VIETNAM

Abstract

The main purpose of the article is to model the main factors affecting non-performing loan incurred in the process of lending to clients in Vietnam's commercial joint stock banks during the period of 2009 - 2017. The theories and empirical research studies for the macro and micro factors affecting nonperforming loan are mentioned in the research paper. Using the qualitative research method and the quantitative research, the article analyzes the practical credit situation of the whole banking system in Vietnam and non-performing loan ratios of selected banks. In addition, the Generalized Method of Moments (GMM) is used in the study to model the major factors impact on non-performing loan. The final results showed that the paper has constructed two models with the result as followed, the first model has six statistically significant variables while the second one has only five variables statistically significant.