International Journal of Humanities and Social Science Research

Authors
Shame Mukoka

Abstract
This study examined the impact of Capital Adequacy Ratio on Non-Performing Loans amongst the Commercial Banks in Zimbabwe during the dollarisation era. The data covered period 2008-2017. In this study, we used the Ordinary Least Squares to estimate the regression equation. After all necessary statistical tests were undertaken, diagnostic tests were done to determine if the model is reasonably well specified. The estimation results revealed that there is a significant inverse relationship between Capital Adequacy Ratio and Non-Performing Loans. There is, therefore, need for the introduction of higher minimum bank capital requirements which may well induce slowdown or contraction of bank lending in Zimbabwe. The enforcement of capital adequacy requirements would significantly curtail credit supply.