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Efficiency of cooperative rural banks in Sri Lanka: the impact of size and location

Ariyarathna Jayamaha,Joseph M. Mula-2010-07-05-University of Southern Queensland ePrints (University of Southern Queensland)
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[Abstract]:
\nIn recent years, small financial institutions (SFIs) have become the most favoured option for poverty alleviation in developing countries. In Sri Lanka, cooperative rural banks (CRBs), as SFIs, have made significant contributions to credit provisioning and savings mobilisation during the last few decades. The efficiency of these institutions is highlighted in all aspect of stakeholders’ recently, due to the collapse of several financial institutions. This paper examines the efficiency of CRBs by using Data Envelopment Analysis (DEA). A comparative analysis of performance evaluation was undertaken to identify similarities and dissimilarities of efficiency improvements among different sizes and different locations of CRBs in Sri Lanka. The results indicate that the overall efficiency of CRBs in Sri Lanka declined over the period 2003-2005. CRBs size has a significant and positive relationship with efficiency in intermediation.

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[Abstract]:
\nIn recent years, small financial institutions (SFIs) have become the most favoured option for poverty alleviation in developing countries. In Sri Lanka, cooperative rural banks (CRBs), as SFIs, have made significant contributions to credit provisioning and savings mobilisation during the last few decades. The efficiency of these institutions is highlighted in all aspect of stakeholders’ recently, due to the collapse of several financial institutions. This paper examines the efficiency of CRBs by using Data Envelopment Analysis (DEA). A comparative analysis of performance evaluation was undertaken to identify similarities and dissimilarities of efficiency improvements among different sizes and different locations of CRBs in Sri Lanka. The results indicate that the overall efficiency of CRBs in Sri Lanka declined over the period 2003-2005. CRBs size has a significant and positive relationship with efficiency in intermediation.

Keywords

Sri lankaData envelopment analysisPovertyIntermediationRural areaEconomicsBusinessSocioeconomics

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