The View of the Citizens in Thessaly Region Regarding the Creation of Non-Performing Loans (NPL’s) in Greece

This paper presents the investigation of the factorial composition and the internal coherence of a questionnaire on the statements of the citizens on non-performing loans (NPLs) and the reasons of their appearance in Greece, based on data gathered from a sample of 216 citizens region of Thessaly. The questionnaire consists of two categories of questions that refer to: (a) statements of citizens about NPLs (scale A) and (b) statements of citizens on the reasons for the occurrence of NPLs. NPL is any loan that the borrower has delayed more than 90 days to pay the agreed interest or agreed installments. A performing loan provides the bank with interest income that it needs in order to make a profit and grant new loans. When customers fail to comply with the agreed repayment arrangements for 90 or more days, the bank must ensure that more funds are available, based on the assumption that the loan will not be repaid. This limits its ability to grant new loans. Factor analysis identified 8 factors for scale A and 8 for scale B, which interpret 75.86% and 75.23% of the total variation in the respective data sets. The same results have emerged both in the hierarchical cluster analysis method for the clustering of the topics (variables) of the two scales (A and B) and in the residuals method for each subject. The analysis of variance (ANOVA) showed that the most important factors of scale A can be considered the "the state should legally protect only the first home of economically weak citizens and reward consistent borrowers" and of scale B the: a) informing citizens about the risk of over-borrowing and restricting bank lending facilities; b) to manage more efficiently the loans granted; c) the Greek Economy have to become more competitive and more efficient; (d) to have a more cautious interest rate policy in times of economic prosperity; e) avoiding populist policies and tackle citizen movements like "I do not pay" and f) leverage to be significantly reduced (a large number of post-dated checks).