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Board composition and non-Performing loans among commercial Banks in Tanzania

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dc.contributor.author Budotela, George
dc.contributor.author Mmari, Goodluck
dc.contributor.author Towo, Nathaniel
dc.date.accessioned 2023-08-22T11:25:36Z
dc.date.available 2023-08-22T11:25:36Z
dc.date.issued 2023
dc.identifier.citation Budotela, G., Mmari, G., & Towo, N. (2023). Board composition and non-Performing loans among commercial Banks in Tanzania. Journal of Accounting Research, Organization, and Economics Vol. 6 (1): 1-18 en_US
dc.identifier.uri http://repository.mocu.ac.tz/xmlui/handle/123456789/568
dc.description A full text article from Banking, Accounting and Finance en_US
dc.description.abstract Objective – This paper investigates the effect of board composition on non-performing loans (NPLs) for a sample of 31 commercial banks in Tanzania. Design/methodology – A quantitative study methodology was employed using annual data covering the period of 2011-2020. The authors used a one-step generalised method of moments (GMM) approach to estimate the effect of board composition on the percentage growth of NPLs in Tanzania. Results – The paper concludes that the number of board members with financial expertise, the board size, the audit committee, and the presence of female directors significantly negatively impact the bank’s NPLs and hence aid in lowering the bank’s NPLs. In contrast, an increase in board size, lagged NPLs, credit committees, independent directors, board meetings, and advances in deposit ratio significantly increases the level of NPLs, which is consistent with the agency theory. Research Limitations/Implications – Inconsistencies in the reported variables from various databases during the study and afterwards, as well as a lack of data for some banks in specific years. Shareholders should actively establish good corporate governance in the commercial banks (CBs) they own to reduce NPLs at an acceptable rate of less than 5%. Also, the Central Banks of Tanzania should encourage CBs to implement effective corporate governance practices by enacting rules and regulations to reduce NPLs. To minimize loan losses, authorities should impose micro-prudential supervision on commercial banks’ lending behavior. Novelty/Originality – The paper includes bank size and ownership using a one-step difference and one-step system (GMM) approach to measure the effect, which is usually not the case with most studies. en_US
dc.language.iso en en_US
dc.publisher Journal of Accounting Research, Organization, and Economics en_US
dc.relation.ispartofseries Vol. 6;1
dc.subject Board composition en_US
dc.subject NPLs en_US
dc.subject Commercial banks en_US
dc.subject One-step GMM en_US
dc.title Board composition and non-Performing loans among commercial Banks in Tanzania en_US
dc.type Article en_US


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