Abstract:

Encountering a set of faults in the loan repayment leads to troubles in the banking system and thus in the economic structure. Therefore this study analyzes the impact of non-performing loans on domestic credits to private sector and investments for the period of 1986-2008 in Turkey. According to the results from multivariate regression analyses, we observed that non-performing loans affect domestic credits to private sector and investments in a reducing way. Those identified negative associations between non-performing loans and domestic credits to private sector and investments are statistically significant at %1 significance level

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