“Effect of non performing loans on performance of commercial banks in Nigeria:- Nwogwugwu Attracta O

ABSTRACT

 The study investigated effect of non performing loans on the performance of commercial banks in Nigeria. The study therefore adopted ex-post facto research design. Based on the research conducted, it revealed that the non-performing loans has significant effect on the profitability of commercial banks in Nigeria. Secondly, it also revealed that the nonperforming loans has significant effect on the liquidity of commercial banks in Nigeria. The study concludes that non-performing loans reduces return on asset, leads to credit crunch, makes it difficult for bank's performance among others. Based on this factors, I recommend that potential borrowers should be critically assessed to ascertain their credit worthiness before they are given loans. And finally, commercial banks should develop credit procedure, policies and analytical capabilities for handling non performing loans.