Macroeconomic Factors and the Performance of Loans of Commercial Banks in Ghana: A Case Study of HFC Bank

With the increasing rate of default of loans in the country, this study assessed the macroeconomic factors that influence loan performance of commercial banks in Ghana using HFC bank as a case study. The sample period used for the study was based on a quarterly data from 2008 to 2015. Using the ARDL bounds test of co-integration as an estimation technique, the results showed evidence of long run relationship among the variables. The results suggest that macroeconomic factors that influence loan performance are inflation and T-bills. Thesetherefore show that macroeconomic instabilities do have significant impact on loan performance. Hence there is the needfor policy makers to manage the economy well, embark on fiscal discipline and reduce government domestic borrowing to reduce Treasury bill rates in order to improve on loan performance.