Control of Non-Performing Loans in Retail Banking by Raising Financial and Consumer Awareness of Clients

  • Kamile Taujanskaite Vilnius Gediminas Technical University
  • Eugenijus Milcius Kaunas University of Technology
  • Simonas Saltenis Aalborg University
Keywords: consumption, household expenditure, consumer behavior, personal finance management, commercial banks, banks performance.


Study aims to quantitatively evaluate the impact, which borrowers’ consumer and financial behavior has on the volume of non-performing retail loans (NPL) in commercial banks of Lithuania and identifies the ways of its control. A strong link between NPL volume and these factors was established. Both are education-sensitive, therefore by investing into financial and consumer awareness raising of clients, commercial banks could improve business conditions in retail-loan market. Recommendations for commercial banks to undertake measures reducing NPL and invest in them were developed as well as methodology for estimation of payback potential of the investment. Study implies that wider context, covering both financial and consumer behavior of clients should be applied when analyzing reasons of poor performance of borrowers. Research methods used: comparative analysis, processing of statistical data, expert evaluation, mathematical analysis.

Author Biographies

Kamile Taujanskaite, Vilnius Gediminas Technical University
Department of Finance Engineering, PhD student (Economics, 04S)
Eugenijus Milcius, Kaunas University of Technology
Faculty of Mechanical Engineering and Design, PhD, Research fellow
Simonas Saltenis, Aalborg University
Department of Computer Science, PhD, Associate Professor