Guiding Factors of Credit Volume on Banking Sector

Abstract

Bank loans are one of the most important financial source for business in the world and Turkey.Banks has two main functions; to collect deposits and to supply credit.Banks activities funds are based on outsourcing as differences from others companies. They take risks by supplying capital which is provided resources. Thus, banks is built on risk managaments strategies. Sustainability of the banking activities depends on effective risk control. The banks have strong risk management process, evaluate the risks involved.they compare taken risks and realised earnings and make a decision at the and of the assesments. In the literatüre, the difference between loans interest rate and deposit interest rate effect of credit supply was observed insignificant. The aim of this study, is assessing the factors affecting the credit volume in the banking sector of Turkey. Monthly data between the years 2003 and 2016-1 have been used. Databases are provided by the Central Bank of the Republic of Turkey and Turkish Statistical Institute. Data analysis was performed with software package Eviews 8. In this study, the relationship among variables in the determination of the model were estimated with Least Squre Method. Subsequently unit root tests were carried out primarily in order to examine the stability of the series, and simple regression model was estimated as a result of the unit root tests. In this study, it is identified that there is a statistically significant negative correlation between the total credit volume (TKRE) with non-performing loans (TAKR), total loan interest income, accruals and rediscount (FO), required reserves (ZORK) and inflation (TÜFE).