The Effect of Bank Specific Factors on Non-Performing Loan: The Case of Commercial Bank of Ethiopia Dire Dawa District

The overall objective of the study is assessing the effect of bank specific factors on non performing loan in the case of the commercial bank of Ethiopian, Dire Dawa district. specifically it investigate the credit assessment, credit monitoring and follow up, collateralized lending, bank credit culture and interest rates relationship with non performing of loan. the research undertaken both explanatory and descriptive research design with mixed approach using both qualitative and quantitative approach. the study target the participants/population only on the dire dawa district. Descriptive statistical techniques ,regression and correlation analysis tools is employed in data analysis. bank relies on the value of keeping records of financial statement to look easily from the current asset and current liability ratio to check that ability of the borrower to repay loan that's why majority of the respondent agreed Is the bank did evaluate the financial statements of the prospective borrower. credit assessment, collateral lending, bank culture and the bank interest rate has a positive correlation with non performance of loan where as credit monitoring and follow up shows a negative correlation with non performance of loan. Lending banks better to be aware of the dangers involved in maintaining bad loans in their books of accounts and make advance preparations as to how disbursed loans should be collected timely. it suggest identify early warning signals, and initiate remedial measures thereby averting loss from possible default.