NON-PERFORMING LOANS AND THEIR REFLECTION ON CASH FLOWS
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Abstract
This research aims to identify financial default, its causes, and ways to control it, and to show evaluating the financial performance of banks, as most banks suffer from the problem of the inability to fulfill the obligations they owe as a result of the management’s misbehavior resulting from its opportunistic behavior, as the research sample bank is facing The risk of bankruptcy and the financial default has become evident in the clear decrease in the cash flow. Financial default has become a risk facing the bank’s management with the weakness of the measures taken, as the list of cash flow and knowledge of non-performing loans is especially important as it is very useful in assessing the availability of financial liquidity in the economic unit. The non-performing loans are caused by several reasons that are due to inefficient management by deciding to grant credit to customers without the presence of a sufficient scientific and objective study of the credit applicant, which results in the emergence of defaulting customers.
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