Measuring Efficiency Performance of Commercial Banks in Ethiopia: A Data Envelopment Analysis Approach
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Date
2008-06
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A.A.U
Abstract
This study concentrates on the efficiency performance of commercial banks in
Ethiopia by examining the efficiency. Changes in productivity and technology.
and potential determinants of the efficiency of a sample of eight commercial
banks during the period 2002/2003-2006/2007. In measuring the efficiency
of commercial banks data envelopment analysis has been employed. The
efficiency scores for the technical efficiency. allocative efficiency. cost-efficiency.
and scale efficiency were found to be 97.68%. 90.24%. 88.5%. and
93.22% respectively. The Malmquist total factor productivity index showed
that on average productivity has been growing by 2.1 % and the growth in
technology change was on average 2.4%. Results from the censored to bit
Model showed that return on equity. Total capital total asset. gross profit. Real
CDP. Number of bank branches. Deposits. The growth rate of loans. the growth
rate of the number of branches. The number of micro-finance institutions. The
growth rate of gross profit. and thegrowtl1 rate of returns on asset had a
statistically Significant effect on at least one of the efficiency scores. Though
The commercial banks were found to be inefficient. There has been an
Improvement in productivity and technology change over the study period.
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Keywords
Efficiency, Measuring