COMPARATIVE STUDY OF DETERMINANTS OF THE MALAYSIAN HOUSEHOLD NONPERFORMING LOANS: EVIDENCE FROM NARDL

This study compares the sensitivity of each household nonperforming loans (NPLs) category in Malaysia, allowing asymmetry across different household credit types, credit cards, personal uses, purchase of residential properties and purchase of transport vehicles. Differences in the impact of household debt on the Malaysian household NPLs are found evident. In the sample period from 2006 to 2018, the findings suggest an asymmetric impact of credit card debts on the household NPLs. This linkage is explained by only short-run negative changes in credit card outstanding loans. Besides that, the residential property loans behave asymmetrically in the long and short run, with higher impact sources from the negative changes. In a disaggregated NPL analysis focusing on a different type of loan portfolio, the asymmetry further enhances policy and regulation-making in managing household credit risk.