The Impact of Macroeconomic Variables on Non-performing Loan in Pakistan

Abstract

Purpose: The main purpose of this study is to find out the relationship between macroeconomic variables and non-performing loans of Pakistan since 1999. I want to watch the trend of data, its relationship with economic cycle and also influence ofthese variables Research Techniques: Research paper target on the Pakistan’s economy on the data from 1999-2014.1 have used the correlation coefficient and multiple regression analysis that helps us to conclude the data Findings: After applying research techniques results showed that the real GDP has significant negative relationship with non-performing loans. On the other hand lending interest rate and exchange rate has significant positive impact on NPLs. unemployment has insignificant weak and negative relationship in the result of con-elation coefficient but in regression analysis it becomes significant and positive to the loan defaults.