Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between non-performing loans and operational efficiency of banks has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Selected Fintech Companies in Nigeria where operating conditions differ markedly from more developed markets.

Selected Fintech Companies in Nigeria presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While non-performing loans is widely discussed in policy and industry circles, empirical evidence on its actual effect on operational efficiency of banks within Selected Fintech Companies in Nigeria remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to non-performing loans are helping or hindering operational efficiency of banks — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Non-Performing Loans on operational efficiency of banks in Selected Fintech Companies in Nigeria.
2. To assess the extent to which non-performing loans influences operational efficiency of banks within the study area.
3. To identify the challenges associated with non-performing loans in relation to operational efficiency of banks.
4. To recommend strategies for optimizing non-performing loans in order to improve operational efficiency of banks.

1.4 Research Questions

1. What is the effect of non-performing loans on operational efficiency of banks in Selected Fintech Companies in Nigeria?
2. To what extent does non-performing loans influence operational efficiency of banks within the study area?
3. What challenges are associated with non-performing loans in relation to operational efficiency of banks?
4. What strategies can be adopted to optimize non-performing loans in order to improve operational efficiency of banks?

1.5 Significance of the Study

Beyond its academic contribution to the field of finance / banking, this study has practical value for management teams within Selected Fintech Companies in Nigeria seeking to understand how non-performing loans translates into measurable outcomes around operational efficiency of banks. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

The study is limited to an examination of Non-Performing Loans and its relationship with operational efficiency of banks within the context of Selected Fintech Companies in Nigeria. It reflects a MSc-level scope of analysis and relies on data and perspectives available within that scope; generalizing the findings beyond this specific context should therefore be done with appropriate caution.