VERSION OF RECORDOpen Access24 December 2025
Building Bridges Between Humanity and Society — The Vision of the Journal of Human-Social Nexus
Mohammad Masukujjaman
10.64939/jhsn.1.1.0001No abstract
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Mohammad Masukujjaman
10.64939/jhsn.1.1.0001No abstract
Bithe Rani Aich, Muhammad Tanveer Islam, Sanjay Bhattacharjee
10.64939/jhsn.1.1.0002Non-performing loans (NPLs) pose a major threat to financial stability in nine emerging Asian and African economies, where rapid credit growth, macroeconomic instability, and institutional weaknesses increase systemic risk. This study examines the determinants of NPLs using a hybrid approach that combines Panel ARDL estimation with SHAP (SHapley Additive exPlanations) machine learning analysis, supported by Fixed and Random Effects robustness tests. The results reveal significant regional differences. In Asia, NPLs are mainly driven by excessive credit expansion and inflationary pressures, supporting the Financial Accelerator mechanism. In Africa, high interest rates and weak institutional quality are the primary drivers, consistent with Institutional and Credit Rationing theories. SHAP analysis confirms that bank credit and domestic credit are the most influential predictors globally, while inflation and regulatory quality are particularly important in Asia and interest rates dominate in Africa. The findings suggest region-specific policy responses, including countercyclical credit regulation in Asia and institutional reforms with interest-rate stabilization measures in Africa to reduce financial vulnerability and strengthen banking sector resilience.