Non-Performing Loans Indicators in Emerging Markets: Evidence from MENA Region

This study aims to investigate the financial determinants of nonperforming loans of 36 conventional banks listed in the Middle East and North Africa (MENA) region.The research covers the period from 2013 to 2023 and includes selected countries namely, Jordan, Egypt, United Arab Emirates, Qatar, Kuwait, Bahrain, Lebanon, Morocco, Saudi Arabia and Tunisia.By utilizing dynamic panel data estimation techniques, the study scrutinized the relationship between four bank-specific determinant variables (Profitability, Operating Efficiency, Bank Size, and Loan growth) and nonperforming loans.Various analytical techniques, including ordinary least squares (OLS), fixed effects, random effects, and generalized method of moments (GMM) were employed in the data analysis phase.Results highlighted that except for loan growth, all variables had a significant positive impact on nonperforming loans.The findings of the study are beneficial to policy makers along with other stakeholders in establishing and reinforcing regulations that would ensure stability and soundness in the banking sector in MENA countries.