Measuring Efficiency Performance Of Commercial Banks In Ethiopia A Data Envelopment Analysis Approach

This study concentrates on the efficiency performance of commercial banks inrnEthiopia by examining the efficiency. Changes in productivity and technology.rnand potential determinants of the efficiency of a sample of eight commercialrnbanks during the period 2002/2003-2006/2007. In measuring the efficiencyrnof commercial banks data envelopment analysis has been employed. Thernefficiency scores for the technical efficiency. allocative efficiency. cost-efficiency.rnand scale efficiency were found to be 97.68%. 90.24%. 88.5%. andrn93.22% respectively. The Malmquist total factor productivity index showedrnthat on average productivity has been growing by 2.1 % and the growth inrntechnology change was on average 2.4%. Results from the censored to bitrnModel showed that return on equity. Total capital total asset. gross profit. RealrnCDP. Number of bank branches. Deposits. The growth rate of loans. the growthrnrate of the number of branches. The number of micro-finance institutions. Therngrowth rate of gross profit. and thegrowtl1 rate of returns on asset had arnstatistically Significant effect on at least one of the efficiency scores. ThoughrnThe commercial banks were found to be inefficient. There has been anrnImprovement in productivity and technology change over the study period.

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