IJSRP, Volume 12, Issue 5, May 2022 Edition [ISSN 2250-3153]
Lee Mahlangu, Taonaziso Chowa
Non-performing loans are a burden on any country’s economy and exert downward pressure on its growth. The aim of the study was to investigate the causes and challenges of non-performing loans in the banking sector in Zambia using a quantitative method approach, with descriptive survey as the design. The research adopted a positivism, deductive approach, case strategy, mono method and cross section time horizon. The sampling technique used was the simple random sampling with a sample size of 78 respondents. Quantitative data analysis was used on primary data collected. The research findings indicated that economic down turn, high interest rates, loss of reliable income are some of the major causes and challenges of non-performing loans in the banking sector. The findings also showed that poor credit collection and monitoring contributes to the challenges of non-performing loans in the banking sector and thus contributing to higher levels of non-performing loans. NPLs are caused by moral hazard and imprudent lending practices by bank employees and owners.