Determinants of credit risk: A multiple linear regression analysis of Peruvian municipal savings banks

In order to identify the determinants that influence the credit risk of Peruvian municipal savings
banks, this quantitative research uses a nonexperimental design and a longitudinal sample to
analyze monthly data corresponding to macroeconomic variables and microfinance institutions’
internal variables from 2011 to 2020. Using multiple linear regression, the results show that the
interest rate, unemployment rate, and liquidity ratio positively influence the credit risk of
Peruvian municipal savings banks; the study also shows that gross domestic product, efficiency
of administrative expenses, solvency, and coverage of provisions exert a negative influence on
credit risk. It is concluded that seven of the eight independent variables studied influence the
credit risk of Peruvian municipal savings banks; only the inflation variable does not significantly
influence credit risk.