The impact of Covid-19 pandemic on the non-performing loans: A study on schedule banks in Bangladesh

Abstract

The unprecedented Covid-19 has brought eccentric challenges to financial sector around the world including Bangladesh. The pandemic has triggered a series of unprecedented emergency measures, including travel bans, mandatory closures of non-essential businesses, compliance restrictions, and mandatory work from home that led to a sharp decline in economic activity, and huge disruption in financial markets. This study aims to investigate the impact of Covid-19 on non-performing loans (NPLs) at banking financial institutions in Bangladesh. Using the data from secondary sources, this paper employs multiple trend analysis to measure the influence of Covid-19 on NPLs. The study found that Covid-19 has a significant effect on NPLs. This study can be used as a reference when considering credit risk management policy during the emergency alike Covid-19 pandemic.