Abstract

This paper aimed to examine the determinants of commercial banks' lending in Jordan. The study sample consisted of ten Jordanian commercial banks during the period 2005-2013. The study used the ratio of credit facilities to total assets as a dependent variable, and eleven independent variables including the ratio of deposits, ratio of non-performing loans, capital ratio, liquidity ratio, asset size, lending rate, deposits rate, window rate, legal reserve ratio, inflation and economic growth rate .

The results showed that the ratio of non-performing loans, liquidity ratio and window rate have a negative and significant impact on the ratio of credit facilities, while found that the bank size and the economic growth have a positive and significant impact on the ratio of credit facilities granted by commercial banks in Jordan. The study recommended Jordanian commercial banks to avoid excess liquidity, and to pay more attention to reduce the ratio of non-performing loans.

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