Macroeconomic Factors and the Performance of Loans of Commercial Banks in Ghana: A Case Study of HFC Bank
European Journal of Economics, Finance and Administrative Sciences
With the increasing rate of default of loans in the country, this study assessed the macroeconomic factors that influence loan performance of commercial banks in Ghana using HFC bank as a case study. The sample period used for the study was based on a quarterly data from 2008 to 2015. Using the ARDL bounds test of co-integration as an estimation technique, the results showed evidence of long run relationship among the variables. The results suggested that macroeconomic factors that influenced loan performance were inflation and T-bills. These therefore show that macroeconomic instabilities do have significant impact on loan performance. Hence, there is the need for policy makers to manage the economy well, embark on fiscal discipline and reduce government domestic borrowing to reduce Treasury bill rates in order to improve on loan performance.
Article published in the European Journal of Economics, Finance and Administrative Sciences, 2016
Loan performance, Treasury bill, Macroeconomic variables
European Journal of Economics, Finance and Administrative Sciences Issue 87