Determinant of Non-Performing Loans (NPLs) of Specialized Financial Institutions (SFIs) of Thailand

Abstract

          Specialized Financial Institutions (SFIs) are state-owned financial institutions and were established to carry out government policy missions in development, economic boosting, public assistance and investment support. This study aims to explore non-performing loans and to examine the determinant of Non-Performing Loans (NPLs) of Specialized Financial Institutions (SFIs) of  Thailand. This research aims to study the factors determining the amount of non-performing debt of specialized financial institutions in Thailand. It has studied both factors, namely macroeconomic factors and specific factors of financial institutions. In this research, a total of 6 specialized financial institutions were studied and collected quarterly data from the financial statements of each specialized financial institution. The study period from Q4/2008 to Q4/2019 included a study period of up to 45 quarters. The analysis process used Fixed Effects Regression and Random Effects Regression models and Hausman test was used. which model is the most suitable model.
            The results of data analysis with descriptive statistics. It was found that the amount of non-performing loans of all 6 financial institutions between Q2 2016 and Q4 2019 averaged 31.64 billion baht. The ratio of non-performing loans to total loans during the same period with an average of 5.89 percent. The results showed that the Fixed Effects Regression model was the most appropriate. According to the study, only one factor positively correlated with the amount of nonperforming debt. was the historical non-performing loan (NPL_t-1) at a statistically significant level of 0.01. It was found that there was no relationship with the amount of non-performing loans of specialized financial institutions in Thailand.