Journal of Economic, Finance Research and Review (JEFRR) · Research article · Open access
Resolving Non-Performing Loans After Crises: A Review of Strategies, Evidence, And the Forbearance Debate
Md Mahbub Ur Rahman, Haseeb Anwar, Raja Muneeb Anwar
7 September 2026 · Vol. 2, Issue 9, pp. 622-624
DOI: 10.65150/EP-jefrr/V2E9/2026-03
Download full text (PDF)Cite this article
What is this article about?
Every major banking crisis leaves behind a stock of non-performing loans (NPLs), and how that stock is resolved shapes the speed and completeness of the subsequent recovery. This paper reviews the theory and cross-country evidence on NPL resolution strategies — write-offs and provisioning, loan restructuring, market sales, and transfers to asset management companies — and on their principal alternative, regulatory forbearance.
Article at a glance
- Published
- 7 September 2026
- Volume / issue / pages
- Vol. 2, Issue 9, pp. 622-624
- ISSN
- 3051-3650 (online) · 3051-3642 (print)
- Licence
- CC BY 4.0 — free to read and reuse with attribution
- Peer review
- Double-blind, at least two independent reviewers
- Publisher
- EP Journals Group
Abstract
Every major banking crisis leaves behind a stock of non-performing loans (NPLs), and how that stock is resolved shapes the speed and completeness of the subsequent recovery. This paper reviews the theory and cross-country evidence on NPL resolution strategies — write-offs and provisioning, loan restructuring, market sales, and transfers to asset management companies — and on their principal alternative, regulatory forbearance. The review synthesises evidence from the canonical historical episodes (Japan's lost decade, the Nordic crises, the Asian financial crisis, the European sovereign debt crisis, and the COVID-19 policy experiment) and from the firm- and bank-level literature on zombie lending. The weight of evidence supports early, transparent loss recognition paired with credible recapitalisation as the strategy most consistently associated with restored credit growth, while sustained forbearance is associated with capital misallocation, depressed competition, and prolonged stagnation. The review also identifies the conditions under which the consensus prescription is qualified: fiscal capacity constraints, the distinct dynamics of the COVID-19 moratoria, and the institutional prerequisites — insolvency regimes, distressed-debt markets, AMC governance — without which aggressive resolution fails in execution. The paper concludes with implications for crisis-preparedness frameworks and a research agenda on resolution in fiscally constrained emerging economies.
Keywords: non-performing loans, banking crises, forbearance, zombie lending, asset management companies, bank recapitalisation, literature review
Cite this article
Md Mahbub Ur Rahman, Haseeb Anwar, & Raja Muneeb Anwar (2026). Resolving Non-Performing Loans After Crises: A Review of Strategies, Evidence, And the Forbearance Debate. Journal of Economic, Finance Research and Review, 2(9), 622-624. https://doi.org/10.65150/EP-jefrr/V2E9/2026-03
@article{Md2026,
title = {Resolving Non-Performing Loans After Crises: A Review of Strategies, Evidence, And the Forbearance Debate},
author = {Md Mahbub Ur Rahman and Haseeb Anwar and Raja Muneeb Anwar},
journal = {Journal of Economic, Finance Research and Review},
year = {2026},
volume = {2},
number = {9},
pages = {622-624},
doi = {10.65150/EP-jefrr/V2E9/2026-03},
url = {https://doi.org/10.65150/EP-jefrr/V2E9/2026-03}
}Questions about this article
Who wrote this article?
Md Mahbub Ur Rahman, Haseeb Anwar, Raja Muneeb Anwar.
Where and when was it published?
In Journal of Economic, Finance Research and Review, Volume 2, Issue 9, pages 622-624, published by EP Journals Group on 7 September 2026.
Is this article free to read?
Yes. It is open access under a Creative Commons Attribution 4.0 (CC BY 4.0) licence, so anyone can read, share and reuse it with attribution.
What is the DOI of this article?
10.65150/EP-jefrr/V2E9/2026-03 (https://doi.org/10.65150/EP-jefrr/V2E9/2026-03).
How do I cite this article?
APA: Md Mahbub Ur Rahman, Haseeb Anwar, & Raja Muneeb Anwar (2026). Resolving Non-Performing Loans After Crises: A Review of Strategies, Evidence, And the Forbearance Debate. Journal of Economic, Finance Research and Review, 2(9), 622-624. https://doi.org/10.65150/EP-jefrr/V2E9/2026-03
More research from JEFRR
- Understanding Green Purchase Intention in the Digital Era: Green Communication, Brand Image, And Brand Trust
Dini Safitri, Sharon Claudia Rambu Podu Diah, Olaf Tri Wilopo Simanjuntak, Muhammad Fadli · Oct 2026
- Digital Marketing Transformation and Consumer Purchase Behaviour in Post-Pandemic Markets
Rezwan Hossain, Muhammad Shoaib, Darda Rahman · Oct 2026
- Effectiveness of Financial Literacy and Financial Inclusion on Competitiveness of Small and Medium Sized Enterprises in Uganda: The Mediating Role of Financial Planning
Eric Nzibonera, Godfrey Akileng, David Namanya · Oct 2026
- Relationship Between Community Policing Participation and Crime Reduction Among Lagos State Neighbourhood Safety Corps (LNSC) in Ikorodu West and Ikorodu Central, Lagos State
Oluwaseun Segun Adejuwon, Jatau Seikhan Nathan, Dr. Ajagun Olusegun Peter, Adebisi Gbenga Adejuwon · Oct 2026
- The Double Divide Revisited: Sector Composition, Within-Sector Adoption and Artificial Intelligence Use Among Minority- And Women-Owned U.S. Businesses
Olufemi Olumayowa Oni, Abimbola Usman, Olusegun Opeyemi Oni, Promise Okwarajiaku · Oct 2026