The evolution of loan volume and non-performing loans under COVID-19 innovations: The Colombian case

Financial institutions' scale of total and non-performing loans are important figures signaling economic activity and its risk level. COVID-19 created an external shock with overarching effects on the global economy, impacting the credit activity and debtors' ability to repay their obligat...

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Detalles Bibliográficos
Autores principales: Benavides-Franco, Julián, Carabalí-Mosquera, Jaime, Alonso, Julio Cesar, Taype-Huaman, Irvin, Buenaventura, Guillermo, Meneses, Luis Angel
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier 2023
Materias:
Research Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10161606/
https://www.ncbi.nlm.nih.gov/pubmed/37151657
http://dx.doi.org/10.1016/j.heliyon.2023.e15420
Descripción
Sumario:Financial institutions' scale of total and non-performing loans are important figures signaling economic activity and its risk level. COVID-19 created an external shock with overarching effects on the global economy, impacting the credit activity and debtors' ability to repay their obligations. We study how Colombia's loans and non-performing loans market ratios could react to an external shock (absent of any relief measures) by developing a vector autoregressive model with exogenous variables (VARX) with the Central Bank intervention rate as an exogenous variable. We use impulse response functions to simulate the impact of the COVID-19 pandemic on the market of loans and default levels in Colombia. Our results show that the effects remain significant over long periods.

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