ISSN: 1019-7044
Volume XLVIII, Nos. 3 & 4, September & December 2023
Published: July 2024
Pages: 98-128
Md. Saiful Islam
Non-banking Financial Institutions (NBFI) are growing very fast in Bangladesh after their first establishment in 1981. Due to some recent unwanted and vulnerable events, it is important to determine the financial health condition of NBFIs. The main focus of this study is to determine the financial health condition of NBFIs in Bangladesh using Altman’s Z’’-Score Model and the impact of different financial ratios on the calculated Z’’-Score. A data set is considered for a 5-year (2015-2019) period for 21 NBFIs in Bangladesh. The study result shows that presently more than 80% of NBFIs are in financially distressed conditions. As per the best-fitted regression model, ‘Random Effect Model’, among the different financial ratios, Non-performing Loans (NPL) and Deposit Ratios (DR) are the most impactful and negatively related to the company’s financial distress condition. It is recommended to strongly control the non-performing loan and mobilize the deposit efficiently for better financial health. JEL Classification: G17, G23, G32, G33
JEL Classification:
Keywords: Cost to Income Ratio (CIR) , Deposit Ratio (DR) , Non-Performing Loan (NPL) , Loan Ratio (LR) , NBFI. , Z’’-Score
References:
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