Non Performing Loan (NPL)

Non Performing Loan (NPL) : hi all, how are you today? have a long time im not writing here. today i want to talk you little review about NPL or we say as Non Perform Loan. My

first question, why Non perform Loan very high when we see it today? its because the cash or loan that was given to borrower, entrepreneurs and citizen at all with the assurance of illiquid (not easily liquidated), like fixed or movable goods.

Bad credit or non-performing loans is the amount of credit disbursed to the debtor but the condition can not be collectible due to certain reasons.
How to calculate it ?
we can use below form to calculate it :
Non-performing loans x 100% (divided) Loans disbursed
The smaller the percentage of NPLs, the better the quality of loans from the institution, and your funds are placed for their safety.

The occurrence of non-performing loans is usually caused by: Credit extended to businesses that are less productive.

1. Collateral in the
form of goods (collateral material) can not guarantee the repayment of the loan because it is illiquid.
2. The absence of institutions that guarantee the return / installment of the loan.
3. There is no guarantee that every month the debtor will be able to pay.
4. The existence of the bad debtor and bad customer.


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