Variables description
| Variable | Description | Measurement/Transformation | Expected effect on NPLs | Supporting literature |
|---|---|---|---|---|
| ΔInflation | Monthly change in consumer price index | First difference of CPI (%) | Ambiguous (may reduce or increase NPLs) | Waemustafa and Sukri (2015), Klein (2013) |
| ΔInterest | Monthly change in lending interest rate | First difference of average lending rate (%) | Negative or Positive | Amuakwa-Mensah and Boakye-Adjei (2015), Louzis et al. (2012) |
| CAR | Capital adequacy ratio | Banks' regulatory capital-to-risk weighted assets (%) | Negative | Berger and DeYoung (1997), Makri et al. (2014) |
| RECAP | Recapitalisation dummy | 1 during active window (2017M09-2019M12); 0 otherwise | Negative | PwC Ghana (2019), Ozili (2019) |
| Δln(NPLA) | Agricultural non-performing loans | First difference of natural log (GHS million) | Dependent variable | N/A |
| Δln(GDPA) | Agricultural GDP | First difference of natural log (GHS million) | Negative | Bernanke et al. (1999), Nkusu (2011) |
| Variable | Description | Measurement/Transformation | Expected effect on NPLs | Supporting literature |
|---|---|---|---|---|
| ΔInflation | Monthly change in consumer price index | First difference of CPI (%) | Ambiguous (may reduce or increase NPLs) | |
| ΔInterest | Monthly change in lending interest rate | First difference of average lending rate (%) | Negative or Positive | |
| CAR | Capital adequacy ratio | Banks' regulatory capital-to-risk weighted assets (%) | Negative | |
| RECAP | Recapitalisation dummy | 1 during active window (2017M09-2019M12); 0 otherwise | Negative | |
| Δln(NPLA) | Agricultural non-performing loans | First difference of natural log (GHS million) | Dependent variable | N/A |
| Δln(GDPA) | Agricultural GDP | First difference of natural log (GHS million) | Negative |
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