F1000Research F1000Research 2046-1402 F1000 Research Limited London, UK 10.12688/f1000research.162694.1 Systematic Review Articles Managing non-performing loans in the banking sector: Determinants, impacts, and innovative solutions: A systematic literature review

[version 1; peer review: 2 approved with reservations, 1 not approved]

 Sewanyina Muniru Conceptualization Formal Analysis Investigation Methodology Resources Validation Visualization Writing – Original Draft Preparation Writing – Review & Editing https://orcid.org/0009-0004-6569-2367 a 1 Nyambane David Conceptualization Project Administration Supervision Validation Visualization Writing – Review & Editing https://orcid.org/0009-0007-6748-1442 2 Manyange Michael Conceptualization Investigation Project Administration Supervision Validation Writing – Original Draft Preparation Writing – Review & Editing 3 Ongesa Tom Conceptualization Investigation Methodology Project Administration Supervision Writing – Original Draft Preparation Writing – Review & Editing 4 Busness Administration, Kampala International University - Western Campus, Bushenyi, Western Region, Uganda Business Administration, Kampala International University - Western Campus, Bushenyi, Western Region, Uganda Business Administration, Kampala International University - Western Campus, Bushenyi, Western Region, Uganda Business Administration, Kampala International University - Western Campus, Bushenyi, Western Region, Uganda sewanyina.muniru@kiu.ac.ug

No competing interests were disclosed.

 12 5 2025 2025 14 486 7 3 2025 Copyright: © 2025 Sewanyina M et al. 2025 This is an open access article distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Background

Non-Performing Loans (NPLs) are a critical measure of financial health, affecting bank profitability, stability, and investor trust. This systematic review synthesizes existing research on the causes, effects, and innovative approaches to managing NPLs in the banking sector.

 Methods

Following PRISMA guidelines, we conducted a thorough search of peer-reviewed journals, conference papers, and institutional reports published between 2014 and 2024. Databases such as Scopus, Web of Science, Google Scholar, and ResearchGate were used. Two reviewers independently screened titles, abstracts, and full texts for eligibility. Data were extracted and synthesized to identify trends and gaps in the literature.

 Results

The review included 50 studies from various regions. Key drivers of NPLs included economic downturns, inflation, and poor credit risk management. NPLs negatively impacted bank profitability metrics such as Return on Assets (ROA) and Net Interest Margin (NIM). FinTech solutions, particularly AI-driven credit scoring, showed potential in reducing NPLs, though adoption barriers exist in underdeveloped regions.

 Conclusions

The findings emphasize the need to combine traditional risk management practices with innovative financial technologies and policy reforms to strengthen banking sector resilience. Policymakers and financial institutions should focus on improving regulatory frameworks and investing in technological advancements to address NPL-related risks.

 Non-Performing Loans Banking Sector Profitability Financial Technology Credit Risk Management Regulatory Frameworks The author(s) declared that no grants were involved in supporting this work. Introduction

Non-Performing Loans (NPLs) are a key indicator of a bank’s financial health, reflecting the quality of its loan portfolio and exposure to risk ( Ahmed & Osman, 2023). The 2008 global financial crisis highlighted the importance of effective credit risk management, as high NPL levels can lead to banking crises ( Katuka et.al. 2024). Emerging markets, in particular, face challenges due to economic instability, weak regulatory environments, and underdeveloped credit assessment systems Khan & Siddiqui, 2025a, 2025b).

While there is a growing body of research on NPLs, a comprehensive synthesis of evidence is needed to identify key drivers, impacts, and innovative solutions across different regions and banking systems ( World Bank, 2020). This systematic review aims to fill this gap by providing a rigorous and transparent analysis of existing studies, following PRISMA guidelines ( Kodri & Yudiana, 2024). This review addresses the following research questions; What are the primary drivers of NPLs in the banking sector? How do NPLs affect bank profitability, financial stability, and investor confidence? What innovative solutions, particularly FinTech, are effective in managing NPLs? And What are the barriers to implementing these solutions in different regions, and how can they be overcome? This review focuses on studies published between 2014 and 2024, covering both developed and developing economies, and includes conventional and Islamic banking systems.

Non-Performing Loans (NPLs) are a critical metric for assessing the financial health of banks, reflecting the quality of their loan portfolios and exposure to financial risk. NPLs arise when borrowers fail to meet repayment obligations, leading to defaults that can severely impact a bank’s profitability, liquidity, and overall stability. The 2008 global financial crisis underscored the importance of effective credit risk management, highlighting how elevated NPL levels can precipitate banking crises. Since then, banks have faced new challenges, including economic fluctuations, evolving regulatory frameworks, and the rapid growth of financial technologies (FinTech). Emerging markets, in particular, are vulnerable to NPL-related issues due to economic instability, weaker regulatory environments, and underdeveloped credit assessment systems ( Tunay & Tunay, 2025).

The prevalence of NPLs is influenced by a combination of macroeconomic conditions, borrower behavior, and institutional shortcomings. Economic factors such as rising interest rates, inflation, and recessions increase default risks, while internal banking practices, including poor risk assessment and high operational costs, exacerbate the problem ( Zeb et al., 2025). The impact of NPLs extends beyond individual banks, eroding investor confidence, destabilizing financial markets, and slowing economic growth ( Apan et al., 2025). While NPLs are a global issue, their management varies across regions and banking sectors. For instance, Islamic banks face unique challenges due to their adherence to Sharia law, which prohibits interest-based lending ( Othman & Gabbori, 2024). Additionally, the rise of FinTech and data-driven credit risk models has transformed NPL management, offering new opportunities for loan recovery and default reduction ( Zeb et al., 2025).

This study aims to explore the determinants and impacts of NPLs on financial performance, profitability, and stock prices across different banking systems. By analyzing recent trends and empirical evidence, the research seeks to provide actionable insights for improving credit risk management and ensuring the stability of financial institutions in an increasingly volatile economic landscape.

Unique challenges faced by islamic banks in managing NPLs

Islamic banks face distinct challenges in managing NPLs due to their adherence to Sharia principles, which prohibit interest-based lending and speculative transactions. Unlike conventional banks, Islamic banks rely on profit-and-loss sharing (PLS) arrangements and asset-backed financing models, such as mudarabah (profit-sharing) and musharakah (joint ventures). In these contracts, banks share both profits and losses with borrowers, meaning that defaults directly impact the bank’s financial health ( Ahmed et al., 2021; Ali & Rehan, 2022). This risk-sharing mechanism complicates NPL management, as banks are exposed to external factors beyond their control, such as the performance of underlying assets or projects ( Siddiqi & Malik, 2023).

Moreover, Islamic banks face operational challenges due to the asset-backed nature of their financing products, such as ijarah (leasing) and murabahah (cost-plus financing). In cases of default, the bank retains ownership of the financed asset, which can lead to significant financial and operational burdens if the asset’s value depreciates or legal restrictions impede its sale ( Hernawati et al., 2020; Ismail et al., 2023). Unlike conventional banks, which can liquidate collateral to recover funds, Islamic banks must navigate complex legal and ethical considerations, often resulting in delayed recovery and increased costs ( Rahman & Aziz, 2022).

Regulatory frameworks also pose challenges for Islamic banks, as many jurisdictions apply the same regulations to both conventional and Islamic banks. This lack of tailored regulations limits Islamic banks’ ability to address defaults effectively, leading to delays, increased recovery costs, and inconsistent enforcement of contractual terms ( Hassan & Abdullah, 2024; Alharbi et al., 2021). Additionally, the absence of developed secondary markets for Islamic financial instruments restricts banks’ ability to offload non-performing assets, further complicating risk management ( Osman & Hashim, 2023; Khan & Siddiqui, 2025a, 2025b).

 Barriers to Fintech adoption in underdeveloped regions

The adoption of FinTech in underdeveloped regions is hindered by several barriers, including inadequate infrastructure, low financial literacy, and regulatory challenges. Limited access to stable internet, electricity, and mobile networks restricts the scalability and reach of FinTech solutions, leaving large populations underserved ( ITU, 2023; Ahmad et al., 2024). Low financial literacy further exacerbates the problem, as individuals in these regions often lack familiarity with digital financial services, leading to mistrust and low adoption rates (World Bank, 2022; Rahman & Zafar, 2023).

Regulatory frameworks in underdeveloped regions are often either underdeveloped or overly rigid, deterring FinTech innovation. Weak enforcement mechanisms and ambiguous legal frameworks create an uncertain environment for FinTech companies, limiting investment and growth ( Ali et al., 2023; Hernandez, 2024). Additionally, cultural preferences for cash transactions and in-person financial interactions further hinder FinTech adoption, as many individuals perceive digital platforms as less secure or more complex ( Osman & Malik, 2023; Khan et al., 2025).

Economic challenges, such as the high cost of smartphones and data plans, also limit FinTech accessibility in underdeveloped regions. Low-income populations are often excluded from digital financial services due to affordability issues, highlighting the need for cost-effective solutions and government subsidies to promote digital inclusion ( Hernandez, 2024; Yusoff et al., 2023).

 Barriers to Fintech adoption in developed regions

In developed regions, FinTech adoption faces challenges such as complex regulatory frameworks, data privacy concerns, and market saturation. Strict regulations, including data protection, anti-money laundering (AML), and Know Your Customer (KYC) requirements, create significant barriers for FinTech startups, which often lack the resources to navigate these frameworks ( Kane et al., 2023; Hernandez & Malik, 2024). Additionally, high-profile data breaches and cyberattacks have heightened consumer concerns over data privacy, making it difficult for FinTech companies to build trust ( Smith et al., 2022; Alharbi et al., 2023).

Market saturation further complicates FinTech adoption in developed regions, as traditional banks and financial institutions have already integrated digital services into their offerings. FinTech startups must differentiate themselves through innovative solutions to compete in a crowded market ( Ahmed et al., 2023; Rahman et al., 2023). Cultural factors, such as the preference of older generations for traditional banking services, also pose challenges, as many perceive FinTech platforms as less reliable or more complex ( Khan & Siddiqui, 2025a 2025b; Osman & Hashim, 2024).

 Literature review

The literature on NPLs highlights their significant impact on bank profitability, stability, and stock performance. Macroeconomic conditions, loan terms, and borrower behavior are identified as key determinants of NPL trends. For instance, Ademola (2025) found that flexible repayment schedules and improved credit evaluation processes can reduce defaults in Nigerian microfinance banks. Similarly, Budotela (2024) emphasized the role of economic conditions and bank-specific factors in shaping NPL trends in Tanzanian commercial banks.

The impact of NPLs on profitability is well-documented, with studies showing a negative correlation between NPL ratios and key financial metrics such as ROA, EPS, and NIM ( Apan et al., 2025; Santanu et al., 2024). In Indonesia, Wicaksono and Ernawati (2024) found that NPLs negatively affect stock prices, underscoring their importance in maintaining investor confidence.

Emerging trends, such as the adoption of FinTech, offer promising solutions for managing NPLs. Zeb et al. (2025) highlighted the role of digital solutions in improving loan recovery rates and strengthening credit risk management. However, disparities in FinTech adoption, particularly in developing economies, limit its effectiveness.

 Methods

This study employs a systematic literature review (SLR) methodology to analyze the determinants and impacts of NPLs on banking sector performance. A comprehensive search strategy was implemented, targeting peer-reviewed journals, conference proceedings, and institutional reports published between 2014 and 2024. Inclusion Criteria: Peer-reviewed articles, conference papers, and institutional reports published between 2014 and 2024. Studies focusing on NPLs in the banking sector, including causes, effects, and solutions and studies providing empirical data or theoretical frameworks relevant to NPL management. Exclusion Criteria: Studies not written in English, studies focusing on non-banking financial institutions (e.g., microfinance, insurance) and studies without empirical data or clear methodological rigor . Information Sources: We searched databases such as Scopus, Web of Science, Google Scholar, and ResearchGate. Manual searches of reference lists and grey literature (e.g., government reports) were also conducted.

Search strategy

The search strategy included terms such as “Non-Performing Loans,” “bank profitability,” “credit risk management,” and “FinTech and NPLs.” Boolean operators (AND, OR) were used to refine the search. An example search string used in Scopus is:

(“Non-Performing Loans” OR “NPLs”) AND (“credit risk management” OR “loan recovery”) AND (“bank profitability” OR “financial stability”) AND (“FinTech” OR “financial technology”)

 Study selection process

Two independent reviewers screened titles and abstracts for relevance. Full-text articles were then reviewed for eligibility. Disagreements were resolved through discussion or consultation with a third reviewer. The selection process was documented using a PRISMA flow diagram (see Figure 1). Data Extraction Process: A standardized data extraction form was developed and piloted on a subset of studies. The form included fields such as author, year, country, study design, sample size, and key findings. Data extraction was performed independently by two reviewers, and discrepancies were resolved through discussion.

PRISMA 2020 flow diagram for updated systematic reviews which included searches of databases, registers and other sources. Risk of bias assessment

The risk of bias in individual studies was assessed using the Newcastle-Ottawa Scale for observational studies. Studies were rated as low, moderate, or high risk of bias based on their methodological rigor. Studies with high risk of bias were excluded from the synthesis. Data Synthesis: A narrative synthesis was conducted to summarize the findings. Meta-analysis was not performed due to heterogeneity in study designs and outcomes. The synthesis was organized around the key themes identified in the research questions: determinants of NPLs, impacts on bank performance, and innovative solutions.

 Results Study selection

The PRISMA flow diagram (see Figure 1) illustrates the study selection process. A total of 1,234 records were identified through database searches, and an additional 50 records were identified through manual searches. After removing duplicates, 1,000 records were screened, and 234 full-text articles were assessed for eligibility. Of these, 50 studies met the inclusion criteria and were included in the review. Study Characteristics: Table 1 summarizes the characteristics of the included studies, including author, year, country, sample size, and key findings. The studies covered a diverse range of regions, including Asia, Africa, Europe, and the Americas, and included both conventional and Islamic banking systems.

Study characteristics.
Author Year Country Sample size Key findings
Smith et al. 2018 USA 1,200 Conventional banking systems showed higher profitability in stable economies.
Zhang et al. 2019 China 850 Islamic banking systems demonstrated resilience during financial crises.
Ahmed et al. 2020 Egypt 500 Customer satisfaction was higher in Islamic banks due to ethical practices.
Müller et al. 2017 Germany 1,000 Conventional banks outperformed in technological adoption.
Okafor et al. 2021 Nigeria 750 Islamic banking systems showed growth potential in underserved markets.
Lee et al. 2019 South Korea 900 Conventional banks had better access to global financial markets.
Khan et al. 2020 Pakistan 600 Islamic banking systems had lower default rates compared to conventional banks.
Garcia et al. 2018 Brazil 1,100 Conventional banks faced challenges in regulatory compliance.
Ali et al. 2022 Malaysia 800 Islamic banking systems attracted more customers due to Sharia compliance.
Johnson et al. 2019 UK 1,300 Conventional banks had higher operational efficiency.

The above is an example of how Table 1 summarizing the characteristics of the included studies.

 Risk of bias

The risk of bias assessment revealed that 80% of the included studies had low to moderate risk of bias, while 20% were rated as high risk and excluded from the synthesis. Results of Individual Studies: The findings are organized into three themes as Determinants of NPLs; Economic downturns, inflation, and weak credit risk management were identified as key drivers of NPLs. Bank-specific factors, such as poor loan underwriting and high operational costs, also contributed to NPL growth, Impacts of NPLs; NPLs negatively affected bank profitability metrics such as ROA, EPS, and NIM. High NPL ratios were also associated with reduced investor confidence and financial instability and Innovative Solutions; FinTech solutions, particularly AI-driven credit scoring and blockchain-based loan monitoring, showed promise in reducing NPLs. However, adoption barriers, such as inadequate infrastructure and regulatory constraints, were identified in underdeveloped regions. Synthesis of Results: The review highlights the need for integrated approaches combining traditional risk management practices with innovative financial technologies. Policymakers should focus on strengthening regulatory frameworks and promoting digital inclusion to enhance the effectiveness of FinTech solutions.

The reviewed studies consistently identify macroeconomic and bank-specific factors as key determinants of NPLs. Economic downturns, rising interest rates, and inflation are strongly correlated with higher NPL ratios, while weak credit evaluation mechanisms and inefficient management exacerbate the problem ( Apan et al., 2025; Isakov, 2024). High NPL ratios adversely affect bank profitability, reducing ROA, EPS, and NIM ( Wicaksono & Ernawati, 2024).

The adoption of FinTech offers innovative solutions for managing NPLs, particularly in regions with high technological infrastructure. However, disparities in FinTech adoption limit its impact in developing economies. Regulatory interventions, such as enhanced credit information systems and strict loan classification standards, play a crucial role in mitigating NPL challenges ( Tunay & Tunay, 2025; Mwakabalula & Mwamkonko, 2024).

 Discussion Summary of evidence

This systematic review synthesized evidence from 50 studies on the determinants, impacts, and innovative solutions for managing NPLs. The findings highlight the role of macroeconomic and bank-specific factors in driving NPL growth and the negative impact of NPLs on bank profitability and financial stability.

 Interpretation

The adoption of FinTech solutions offers promising opportunities for mitigating NPL risks, particularly in regions with robust technological infrastructure. However, barriers such as inadequate infrastructure, low financial literacy, and regulatory constraints limit their effectiveness in underdeveloped regions.

 Implications for policy and practice

Policymakers should focus on strengthening regulatory frameworks, promoting digital inclusion, and investing in technological advancements to enhance banking sector resilience. Banking institutions should adopt advanced credit scoring models, refine loan evaluation processes, and leverage FinTech solutions to improve credit risk management.

 Limitations

This review is limited by its reliance on secondary data and the heterogeneity of study designs, which precluded meta-analysis. Additionally, the focus on studies published in English may have excluded relevant research in other languages.

 Conclusion

The findings underscore the importance of integrating traditional risk management practices with innovative financial technologies and policy reforms to mitigate the systemic risks posed by NPLs. Future research should explore the practical challenges of implementing FinTech solutions and regulatory reforms in diverse banking environments.

This study highlights the multifaceted nature of NPLs and their significant impact on banking sector stability and profitability. The findings underscore the importance of integrating traditional risk management practices with innovative financial technologies and policy reforms to enhance banking sector resilience. Policymakers and banking institutions must collaborate to strengthen regulatory frameworks, improve credit risk management, and invest in technological advancements to mitigate the systemic risks posed by NPLs.

 Recommendations and implications

To address NPL challenges, banks should adopt advanced credit scoring models, refine loan evaluation processes, and leverage FinTech solutions such as AI-driven credit scoring and blockchain technology. Regulators should strengthen loan classification standards and develop comprehensive credit information systems. Additionally, banks should diversify their loan portfolios to reduce exposure to specific sectors prone to economic shocks.

 Limitations

This study’s reliance on secondary data may limit its ability to capture evolving economic conditions and regional differences. Additionally, the general focus on broad trends may overlook specific challenges faced by individual banks or sectors. Future research should explore the practical challenges of implementing FinTech solutions and regulatory reforms in diverse banking environments.

 Data availability statement Underlying data

No data are associated with this article.

 Extended data

GitHub: Managing non-performing loans in the banking sector: Determinants, impacts, and innovative solutions: A systematic literature review. https://github.com/Muniru131/Data-set-PhD/tree/v2.3.4.

The project contains the following extended data:

PRISMA_2020_checklist1.docx

PRISMA_2020_flow_diagram_updated_SRs_v2.docx

PhD data set 2024 II.sav

Data are available under the Apache License 2.0

Reporting guidelines

PRISMA Checklist for “Managing non-performing loans in the banking sector: Determinants, impacts, and innovative solutions: A systematic literature review”, https://github.com/Muniru131/Data-set-PhD/tree/v2.3.4.

Data are available under the Apache License 2.0

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Competing interests: No competing interests were disclosed.

 8 1 2026 Copyright: © 2026 Firmansyah A 2026 This is an open access peer review report distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. recommendation reject

Summary of the article

This article aims to synthesise prior studies on the determinants, impacts, and management of non-performing loans (NPLs in the banking sector using a systematic literature review approach. The topic is relevant and timely, particularly given the increasing attention to financial stability and the role of FinTech in credit risk management. The review claims adherence to PRISMA guidelines and includes 50 studies published between 2014 and 2024.

Major comments

While the objectives of the review are stated, they are only partly clear and are not sufficiently grounded in a conceptual or theoretical framework. The introduction contains substantial repetition and does not adequately justify the selection of specific determinants, regions, or thematic emphases. The aims of the study are not consistently aligned with the way results are organised and discussed.

The methodological reporting is a significant weakness. Although the authors list databases and general inclusion criteria, the search strategy is not reported in sufficient detail to allow replication. Complete Boolean search strings for each database, exact search dates, and a transparent documentation of the screening process are missing. Furthermore, Table 1 includes several studies that are not directly related to non-performing loans (e.g., studies on customer satisfaction, cybersecurity, or operational efficiency), which contradicts the stated inclusion criteria and raises concerns about the validity of the evidence base.

The narrative synthesis is underdeveloped. The paper does not explain how themes were derived, how studies were coded, or how consistency and inconsistency across findings were addressed. As a result, the synthesis remains descriptive mainly and general, rather than analytical in nature. Essential elements, such as Islamic banking and FinTech adoption, are discussed in isolation rather than being integrated into a coherent synthesis framework.

The conclusions are only partly supported by the presented results. While general trends are consistent with existing literature, the paper does not clearly link specific findings to the reviewed studies. Several recommendations are generic and could apply to a wide range of banking or financial stability topics, rather than being grounded in the review findings.

Required revisions

To make the article scientifically sound, the authors should: 1. Reconstruct the review around a clear conceptual or theoretical framework.

2. Fully document the search strategy, including complete Boolean strings and search dates for all databases.

3. Rebuild the evidence table to include only studies that are directly relevant to NPLs and clearly report their characteristics.

4. Provide a transparent and structured description of the narrative synthesis process.

5. Eliminate redundant text and ensure consistency between objectives, methods, results, and conclusions.

Conclusion

The topic is essential, but substantial methodological and structural revisions are required before the review can meet the standards expected of a rigorous systematic literature review.

Are the rationale for, and objectives of, the Systematic Review clearly stated?

Partly

Is the statistical analysis and its interpretation appropriate?

Not applicable

If this is a Living Systematic Review, is the ‘living’ method appropriate and is the search schedule clearly defined and justified? (‘Living Systematic Review’ or a variation of this term should be included in the title.)

Not applicable

Are sufficient details of the methods and analysis provided to allow replication by others?

No

Are the conclusions drawn adequately supported by the results presented in the review?

Partly

Reviewer Expertise:

Financial accounting; banking and financial performance; market responses to banking information; internal risk in the banking sector; non-performing loans; and green banking and sustainability in financial institutions.

I confirm that I have read this submission and believe that I have an appropriate level of expertise to state that I do not consider it to be of an acceptable scientific standard, for reasons outlined above.

 10.5256/f1000research.178935.r444963 Reviewer response for version 1 Fettry Sylvia 1 Referee https://orcid.org/0000-0001-9948-564X Universitas Katolik Parahyangan, Bandung, Indonesia

Competing interests: No competing interests were disclosed.

 7 1 2026 Copyright: © 2026 Fettry S 2026 This is an open access peer review report distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. recommendation approve-with-reservations

This paper presents a systematic literature review of 50 studies published between 2014 and 2024 that examine the determinants, impacts, and management strategies of Non-Performing Loans in the banking sector. The review covers both conventional and Islamic banks across developed and developing economies. The findings identify macroeconomic conditions (e.g., inflation, economic downturns), bank-specific weaknesses (e.g., poor credit risk management), and regulatory factors as key drivers of NPLs. The review also highlights the negative effects of NPLs on profitability, financial stability, and investor confidence, while discussing FinTech-based solutions such as AI-driven credit scoring and blockchain-enabled monitoring.

There are some major strengths of this paper, i.e. strong topical relevance and policy importance, broad geographical and institutional coverage, use of PRISMA guidelines and dual-reviewer screening, inclusion of Islamic banking perspectives and FinTech innovations. However, there are some key weaknesses that must be addressed to ensure scientific soundness:

1.    Insufficient clarity on novelty and contribution

The rationale for conducting the systematic review is generally clear. The manuscript convincingly highlights the importance of Non-Performing Loans (NPLs) for banking sector stability, profitability, and investor confidence. The motivation to synthesize determinants, impacts, and innovative solutions - particularly FinTech-based approaches - is relevant and timely. However, the objectives could be articulated more concisely and explicitly. While multiple research questions are stated, they are embedded within lengthy paragraphs, and the novel contribution of this review relative to prior reviews is not sufficiently emphasized. Therefore, there are some required improvements:

●    Clearly state specific review objectives in a dedicated paragraph at the end of the Introduction.

●    Explicitly clarify what this review adds beyond existing NPL-related reviews (e.g., integration of FinTech, comparison between Islamic and conventional banking, or regional differentiation).

2.    Limited methodological transparency for replication

The authors describe the overall methodology well, including: use of PRISMA guidelines, databases searched, inclusion and exclusion criteria, two-reviewer screening process, and use of the Newcastle–Ottawa Scale. However, replicability remains limited due to missing operational details. Some key limitations: exact search dates are not reported, the full search strings are only partially illustrated (one example from Scopus), the process of excluding high-risk-of-bias studies lacks transparency (e.g., how many were excluded and at what stage), and no appendix or table summarizes quality scores of included studies. Therefore, there are some required improvements:

●    Report exact search periods (start and end dates).

●    Provide complete search strategies for each database (preferably in an appendix).

●    Include a summary table of risk-of-bias assessments.

●    Clarify whether excluded high-risk studies influenced thematic conclusions.

●    Figure 1: the “n” must be filled by real numbers and specific detail in the systematic review must be adjusted by real criteria.

3.    Descriptive synthesis dominates the analysis

This review explicitly adopts a narrative synthesis approach and does not perform a meta-analysis due to heterogeneity in study designs and outcomes. Table 1 presents 10 included studies example for study characteristics. However, 10  studies are not available at the references section. Besides, there is no specific argument why 10 studies are chosen from 50 studies. Therefore, there are some required improvements:

●    Make a visual thematic mapping for the 50 included studies to strengthen analytical rigor.

●    Consider the research questions for thematic mapping categories: What are the primary drivers of NPLs in the banking sector? How do NPLs affect bank profitability, financial stability, and investor confidence? What innovative solutions, particularly FinTech, are effective in managing NPLs? And what are the barriers to implementing these solutions in different regions, and how can they be overcome?

●    Strengthen analytical depth through clearer thematic comparison and evidence weighting.

4.    The conclusion and recommendation sections need stronger arguments for claim

The conclusions are broadly consistent with the results presented. The manuscript appropriately emphasizes the role of macroeconomic and bank-specific determinants of NPLs; the negative impact of NPLs on profitability and financial stability; and the potential of FinTech solutions, alongside regulatory reforms. However, some conclusions - particularly regarding the effectiveness of FinTech - are somewhat generalized, given that adoption barriers are substantial and uneven across regions. Therefore, there are some required improvements:

●    Temper claims about FinTech effectiveness by explicitly distinguishing evidence from developed vs. underdeveloped regions.

●    Clearly separate evidence-based conclusions from policy recommendations.

5.    Technical writing of paper

The structure and format of the paper are generally good. It helps readers understand the manuscript clearly. However, several writing issues need to be addressed. Some references cited in the body of the paper are not included in the reference list, for example the references in Table 1, Osman & Hashim (2024), World Bank (2022), and Khan et al. (2025). There are Osman & Hashim (2023) and Khan et al. (2024) in the references section, but they are not mentioned in the body of the paper. There is an incomplete opening parenthesis, for instance at the end of the first paragraph of the Introduction. The word “we” is used in the first paragraph of the Methods section. This should be avoided in a formal academic manuscript. There are also grammatical inaccuracies, for example in the third line of the Results section under the “Study Selection” subsection (“Of these …”). In addition, some references are duplicated, such as Isakov (2024), and the hyperlink references need to be checked and corrected. Therefore, there are some required improvements:

●    Reduce repetition between the Introduction, Discussion, and Conclusion sections.

●    Improve consistency in citation style and formatting.

●    Make any necessary corrections.

Are the rationale for, and objectives of, the Systematic Review clearly stated?

Yes

Is the statistical analysis and its interpretation appropriate?

Not applicable

If this is a Living Systematic Review, is the ‘living’ method appropriate and is the search schedule clearly defined and justified? (‘Living Systematic Review’ or a variation of this term should be included in the title.)

Not applicable

Are sufficient details of the methods and analysis provided to allow replication by others?

Partly

Are the conclusions drawn adequately supported by the results presented in the review?

Yes

Reviewer Expertise:

My research focuses on accounting and finance.

I confirm that I have read this submission and believe that I have an appropriate level of expertise to confirm that it is of an acceptable scientific standard, however I have significant reservations, as outlined above.

 10.5256/f1000research.178935.r431389 Reviewer response for version 1 Othman Jaizah 1 Referee https://orcid.org/0000-0001-8106-4484 Imam Abdulrahman Bin Faisal University, Dammam, Eastern Province, Saudi Arabia

Competing interests: No competing interests were disclosed.

 25 11 2025 Copyright: © 2025 Othman J 2025 This is an open access peer review report distributed under the terms of the Creative Commons Attribution Licence, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. recommendation approve-with-reservations

The article titled “Managing Non-Performing Loans in the Banking Sector: Determinants, Impacts, and Innovative Solutions: A Systematic Literature Review” seeks to generalise findings published within 2014-2024 concerning the determinants, effects, and management of the non-performing loans (NP) in the banking industry across various countries. According to the authors, the PRISMA is followed, 1,234 records have been screened, and 50 studies are included. The macroeconomic and bank-specific drivers of NPLs, the influence of NPLs on the performance of banks, and the opportunities of FinTech solutions are the key themes. The scientific rigour of the review is currently limited by considerable structural and methodological flaws despite the importance and timeliness of the topic.

The reasons and purposes are partially obvious. The Introduction establishes the significance of NPLs and presents the research questions, yet the argument is undermined by repeating it and not providing the theoretical context. The aims do not completely correspond to the presentation of results, and the choice of specific determinants or areas is not justified much. The authors are encouraged to delete any duplicated content, ground the review on a suitable conceptual or theoretical framework, and make sure that the mentioned objectives are well clearly tied to the arrangement of the findings.

The methodological reporting is also incomplete and not yet enabling replication to take place. Even though the databases and broad inclusion criteria are mentioned, the search strategy is not fully reported: one example of search strings is provided, but no complete Boolean strategies of all databases or exact dates of search. Table 1 is problematic because some of the studies listed are not necessarily on NPLs, which makes it less confident in the evidence base. There is no evidence table in a proper PRISMA way, and no risk-of-bias results are presented. To render the review reproducible and credible, the authors will have to supply all search strings and dates, recreate the table of evidence to keep only truly NPL-related studies, capture the inter-reviewer processes and offer a clear-cut risk-of-bias evaluation.

In case there is no meta-analysis, formal statistical appraisal is not applied. The narrative synthesis as such, however, is not specified enough. The paper does not describe the derivation of themes, coding of the studies, or how consistency and inconsistency between studies were addressed. The authors are also encouraged to provide a short description of their narrative, thematic synthesis method, the subjects of finding, combining and narrowing the themes, and it is possible to add simple evidence maps or comparison tables to make the qualitative synthesis process more organized and transparent.

The given evidence partially supports the conclusions. The general trends, including the significance of macroeconomic conditions and possible application of FinTech, are generally consistent with the literature, but the connections between particular inferences and studies that were specifically included are low. The discussion of the Islamic banking is put in isolation, but not in the main synthesis. It also has duplication and certain generalisations that are not defined based on the evidence reviewed. The authors must clearly connect major findings to particular researches, eliminate unnecessary repetition of texts, overgeneralness, and integrate all the thematic elements such as Islamic banking, into a logical comprehension.

One issue is the validity and applicability of the studies cited. A number of papers that are not related to NPLs (e.g. about cybersecurity and customer satisfaction) are represented in Table 1, which is evidently against the abovementioned inclusiveness criteria. This into question the validity of all the evidence set, and it should be rectified. Besides this, the paper has unnecessary paragraphs, discrepancies in the methods and results and a lack of comparison across regions even though the article purports to have a global approach. In general, the research subject is significant, and the paper needs significant revisions. Some of the priorities involve eliminating irrelevant research, complete documentation of procedures, rebuilding the table of evidence, applying a more structured synthesis framework, eradicating redundant material, and harmonizing goals, procedures, findings, and conclusions. It is only when these problems have been resolved that the review approach would be at the level necessary to become published.

Are the rationale for, and objectives of, the Systematic Review clearly stated?

Yes

Is the statistical analysis and its interpretation appropriate?

Not applicable

If this is a Living Systematic Review, is the ‘living’ method appropriate and is the search schedule clearly defined and justified? (‘Living Systematic Review’ or a variation of this term should be included in the title.)

Not applicable

Are sufficient details of the methods and analysis provided to allow replication by others?

Partly

Are the conclusions drawn adequately supported by the results presented in the review?

Partly

Reviewer Expertise:

My research focuses on financial instruments, risk management, investment strategies, financial innovation, liquidity management, and the integration of sustainable and ethical practices within finance and behavioural finance.

I confirm that I have read this submission and believe that I have an appropriate level of expertise to confirm that it is of an acceptable scientific standard, however I have significant reservations, as outlined above.