non performing loan..

im currently doing my research paper titled Factors causing non performing loan in Malaysia's Banking System..

So far i've found out several factors but i dont know whether it is the rite one for my title..mmm...my varibles that i've chosen is interest rate, loan disbursement and consumer price index..is it related?

From my own opinion,i think that interest rate can make a loan to become a non performing loan or even worsen,default loan. If the borrower apply a conventional loan with conventional banks who practising a market based interest rate, the borrower might delaying his or her payment due to the fluctuations of interest rate.
This is due to the economy condition. Moreover, there is also a probabily of increasing in consumer prices due to inflation. When the consumer prices increased,the expenses will increases as well and people will not want to save as their disposable income has shrinked due to greater expenses. This will cause a borrower to delay their payment or even not making any payment at all because of the insufficient money.

While for loan disbursement,if the amount of loan being disburse is big, the probability of npl might be greater. Eventhough loan is major income for banks, but loan also give a high risk to the banks. Every banks will a risks as soon as they disburse the loan. What happen is the borrower did not make a repayment of their loan?banks will suffer losses and this will also might lead to bank run, where banks unable to cover the unexpected withdrawals from their customer. It explained that the banks liquidity has declined.

whoever read this, i was hoping u to leave a comment to help me in my research topic..
thank u!