non-performing loans

Non-performing loans (NPLs) are loans in which borrowers are unable to make interest payments or repay the principal as agreed, typically after 90 days of missed payments. These loans pose a risk to banks and financial institutions because they represent lost income and potential losses. High levels of NPLs can indicate economic problems and affect a bank's stability. In essence, NPLs show that some borrowers are struggling financially, making it difficult for lenders to maintain profitability and manage their financial health.