The Relationship between Lending Rate and Nonperforming Loans in Commercial Banks: Evidence from Pakistan (2008-2014)

Abstract

The objective of the study was to examine the relationship between lending rate and nonperforming loans in commercial banks of Pakistan. The study collects data on bank size and nonperforming loans from the annual reports of commercial banks and lending rates data was collected from the state bank of Pakistan statistical bulletins for the period of 2008-2014 and the data was analyzed through SPSS to examine the relationship between lending rate and nonperforming loans. The study used correlation and regression methods. The study found a significant positive relationship between lending rate and nonperforming loans in commercial banks of Pakistan