Number

NPL determinant

Definition

Type of characteristic

1

Adverse

Borrowers who experienced adverse at the time of assessing the application

Character

2

Age

The age of the borrower

Character

3

Bankrel

Four indicators for the type of banking relationship:

1. no customer,

2. only loans,

3. only deposits,

4. deposits and loans.

Capital

4

Collateral

Four indicators for the type of collateral:

1. no collateral,

2. securities (checks-exchange),

3. “mortgage on the property”,

4. cash collateral cover (deposits, bancassurance and investment savings products).

Collateral

5

LTT

Loan to turnover ratio.

Economic Conditions

6

Owfac

dummy variable taking the value 0 if the borrower had not owned facilities and the value 1 if the borrower had owned facilities at the time of assessing the application.

Capacity

7

Property

dummy variable taking the value 0 if the borrower and the guarantor meet the criterion of real estate, or the value 1 otherwise.

Capital

8

Residence

Three indicators for the type of residence: 1. “rented house”,

2. “live with parent”, and

3. “private residence”.

Capacity

9

Years

The years of vocational experience.

Economic conditions