Non Perfoming Loans in Commercial Banks in Zimbabwe Is Now a Cause of Concern as It Is Threatening the Survival of Banks Bit by Bit

ACCOUNTING, BANKING AND FINANCE AT THE HARARE AND CHITUNGWIZA REGION OF THE ZIMBABWE OPEN UNIVERSITY.

Maastricht University School of Business and Economics Maastricht, 4th December 2011 Bastian Hauk, BH ID number: i6034999 Study: International Business Course Code: EBC1009 Economics & Business Group Number: 31 Economics Tutor: Khan Writing Tutor: Hetty Bennink Writing Assignment: Main Paper

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Several of world’s best managed financial institutions went bankrupt and rests are dying for bail out. The world demand cycle is heading south and

24. Laud, G.M. (1983), Seven Decades of Innovative Banking, The Maharashtra State Co-operative Bank Ltd., Mumbai, p-168

Faculty of Economics and Management Sciences, International Islamic University, Malaysia, Box No. 10, 50728 Kuala Lumpur, Malaysia. 2 Graduate School of Management, International Islamic University, Malaysia, Box No. 10, 50728 Kuala Lumpur, Malaysia.

For instance, the inflation rate rose from an annual average of 25.96 per cent between 1986 to 1990 to an average of 48.92 per cent from 1990 to 1995 while the economy grew in real terms at an average of 5.99 per cent and 1.53 per cent respectively. The performance of the naira exchange rate has also been very poor with an average exchange rate of N5.2/$ between 1986 and 1990 reaching an annual average of $99.15/$ between 2001 and 2004, an average depreciation of 1806.73 per cent under two decades. All these and other factors peculiar to individual banks have jointly influenced the behaviour and performances of the banking industry as they try to adjust to the vagaries of the macroeconomic environment. Olaniyan (2000) has indicated that inflation and its variability are part of the important indicators of macroeconomic instability in Nigeria with significant negative impact on investment. This study sets out to investigate specifically, whether instability in the macroeconomic environment impacts positively or otherwise on the lending behaviour of the Nigerian banking sector. As observed by Baum, Caglayan and

European Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 11 (2008) © EuroJournals, Inc. 2008 http://www.eurojournalsn.com

Good morning members of the high table, my colleagues in the industry and all other distinguished guests. It is my greatest pleasure to present this paper at the Foreign Exchange seminar organized by the Chartered Institute of Bankers of Nigeria. I hope I am able to shed light on this extremely challenging topic.

As a result, the sector was confronted by rampant bankruptcies, collapse, and breakdown of several banks. This was a source of concern for the regulators and the general public because several customers and investors lost their life savings to dubious bank operators. The appalling situation in the sector leading to 2004 compelled the bank regulators “Central Bank of Nigeria (CBN)”, to decisively intervene to restore the public confidence in the banking sector and the financial system of the country (B. Adeyemi, 2011). In 2001, a deregulation in banking sector saw the in the issuance of universal banking licences to several of banks to operate as retail bank

Oromia International Bank (OIB), the company on which this study has been carried out, was licensed on September 18, 2008 G.C. The bank was established in accordance with the pertinent laws, regulations and the 1960 Commercial Code of Ethiopia, by the Monetary and Banking Proclamation No. 83/1994 and by the Licensing and Supervision of Banking Proclamation No. 592/2008. At the time of its establishment, OIB’s authorized capital was ETB 1.5 billion, whereas its subscribed capital was ETB 279.2 million, and its paid-up capital ETB 91.2 million. OIB began operation on October 25, 2008 by opening its first branch at the Dembel City.

Department of Financial Studies Redeemer’s University, km 46, Lagos Ibadan Expressway Mowe, Ogun State E-mail: davfol@yahoo.com, Tel No.: 07037794073

A Thesis Submitted to the School of Graduate Studies of Addis Ababa University in Partial Fulfillment of the Requirements for the Degree of Master of Science in Accounting and Finance

MD. Shibli Shahrir Assistant Professor Department of Business Administration Faculty of Business and Economics Daffodil International University

The Kenya’s banking sector has witnessed rapid growth in the recent past resulting in a scramble for the available customers. There were 49 banks in Kenya in 2003. The banks face stiff competition and the only way to survive is by being updated