The Research Department of Economics and Management of Tadbir Nikan Business, Marketing, and Finance Open 3092-6238 In Press 2027 06 01 Examining the Effect of Smart Contract Features on Factors Affecting the Reduction of Non-Performing Bank Loans Examining the Effect of Smart Contract Features on Factors Affecting the Reduction of Non-Performing Bank Loans 1 18 EN Journal Article 2026 04 14 <p>Non-performing bank loans are among the fundamental challenges facing Iran’s banking system. Blockchain-based smart contracts, owing to their distinctive characteristics, have considerable potential for managing such loans. The present study aimed to examine the effect of smart contract features on factors affecting the reduction of non-performing bank loans. In terms of purpose, this research is applied, and in terms of methodology, it is descriptive-correlational. The statistical population consisted of 26 banks active on the Tehran Stock Exchange during the 2012–2025 period. A fixed-effects panel data regression model was employed to test the hypotheses using EViews software. Ten key smart contract features—including self-execution, use of blockchain, transparency, elimination of intermediaries, cost reduction, security, speed, real-time monitoring, interoperability, and automatic collateral registration—were considered as independent variables, while the score of factors affecting the reduction of non-performing bank loans was considered the dependent variable. The results of testing the second hypothesis indicated that all ten smart contract features had positive and statistically significant effects on the reduction of non-performing bank loans at the 95% confidence level. The F-statistic was 25.431 (Prob. = 0.000), and the adjusted coefficient of determination was 0.255, indicating an adequate model fit. The Durbin–Watson statistic (1.831) also confirmed the absence of autocorrelation. Smart contract features, particularly self-execution, transparency, security, and automatic registration, can directly and significantly contribute to reducing non-performing bank loans. These findings indicate that developing the technical and legal infrastructure required to implement smart contracts in Iran’s banking system could provide an effective approach to credit risk management and substantially reduce non-performing bank loans.</p> https://www.bmfopen.com/index.php/bmfopen/article/download/593/465