The Causes and Effects of Non-Performing Loans (NPL)

The main objective of this study was to examine the causes and effects of Non-Performing Loans (NPL) in Ghana using Rhema AG Co-operative Savings and Social Services Society Limited. Specifically, the study aimed to;

1. Identify the main causes of NPLs in Ghanaian financial institutions.
2. Investigate the effects of NPLs on Ghanaian financial institutions.
3. Examine ways of reducing NPL amongst financial institutions.

The study was descriptive in nature and adopted a quantitative design approach. Quantitative research designs are used when researcher seeks to conduct statistical analysis, use lots of subjects, or strive for accuracy and to generalize. The population of the study comprised all employees of Rhema AG Co-operative Savings and Social Services Society Limited. Their total number was forty (40). Looking at the small number of employees, all forty (40) employees were sampled out for the study. Hence the sample size for the study was forty (40).  Within the frame of the non-probability sampling, convenience sampling was used. Questionnaires were used as the data collection instrument. The Statistical Package for Social Sciences (SPSS) was used in the analysis of data.