Issue 2021, v8, S2, 2


The Journal of Corporate Governance,  Insurance, and Risk Management (JCGIRM).2021, Volume 8, Series 2

Does financial inclusion reduce non-performing loans and loan loss provisions?

Peterson K. Ozilia,*, Ahmed Adamub

a Central Bank of Nigeria, Abuja, Nigeria

Nile University of Nigeria, Abuja, Nigeria

b Nile University of Nigeria, Abuja, Nigeria.

A B S T R A C T   A R T I C L E   I N F O
We examine whether countries that have high levels of financial inclusion have fewer non-performing loans and loan loss provisions in their banking sectors. The fixed effect panel regression methodology was used to analyse the effect of financial inclusion on bank non-performing loans and loan loss provisions. Using data from 48 countries, we find that greater formal account ownership is associated with high non-performing loans. Bank loan loss provisions are fewer in countries that have high levels of financial inclusion only when financial inclusion is achieved through the combined use of formal account ownership, bank branch supply and ATM supply. Also, non-performing loans are fewer in countries that experience economic boom and high levels of financial inclusion.   Keywords:

financial inclusion, non-performing loans, loan loss provisions, financial stability, bank stability, ATM, formal account ownership.

*Corresponding author:

petersonkitakogelu@yahoo.com

(Dr Peterson K. Ozili)

Article history:

Received 30.05.2021

Revised: 25.07.2021

Accepted 19.08.2021

DOI: https://doi.org/10.51410/jcgirm.8.2.2

 

Cite Article (APA): Ozili P.K. and Adamu, A. Does financial inclusion reduce non-performing loans and loan loss provisions?. The Journal of Corporate Governance, Insurance, and Risk Management (JCGIRM).2021, Volume 8, Series 2, Pages 10-24

 

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