Non-Performing Loans in Jordan

The issue of non-performing loans has been a major area of concern in Jordan. This study was focused on analysing a quantitative study in Jordan on non-performing loans, by deriving data from 12 banks in Jordan. The data used for the analysis were extracted from 2001 to 2019. Several objectives were analysed in this study. These objectives include; investigation of bank specific determinants of non-performing loans, the analysis of macroeconomic variables of non-performing loans and an overall analysis of non-performing loans in Jordan. The data were analysed using e-views, which were later interpreted. Moreover, results from the correlation matrix indicated that CAR, LD, NL, GDP, EMP have a negative relationship with non-performing loans, and ROA, LTOA, INF, CRED, and BUDG have a positive relationship with the dependent variable. In addition, regression results shows that among bank specific variables CAR, ROA, DOA, LD and LTOA were found to be statistically significant and that increases in these banks' variables would affect the non-performing loans negatively. Beyond that, it was determined that only inflation among macroeconomic variables would affect the non-performing loans statistically significantly and positively. Keywords: Non-performing Loans, Jordan Banks, Macroeconomic Factors.