Net Interest Margin (NIM) is a financial metric used by banks and financial institutions to measure the difference between the interest income generated from loans and the interest paid on deposits. It is expressed as a percentage of the total earning assets. A higher NIM indicates that a bank is effectively managing its interest income and expenses, which can lead to greater profitability. NIM is important for assessing the overall health of a bank, as it reflects how well the institution is utilizing its assets to generate income. Factors influencing NIM include interest rates, loan demand, and competition in the banking sector. Understanding NIM helps investors and analysts evaluate a bank's performance and operational efficiency.