Darwin Azaga

Measuring Technical Efficiency of Commercial Bank of Ethiopia Darwin Azaga

The foremost aim of the book is to measure technical efficiency of Commercial Bank of Ethiopia Adama district branches during period 2010/2011. In order to measure two approaches were employed to which also help to select the input and output mix . The inputs used are operating expense, salary expense, deposit and interest expense and the outputs were deposit, loan, interest income and noninterest income for production and intermediation approaches. The measurement of efficiency is done by using data envelopment analysis based on Banker, Charnes and Cooper input oriented model in order to advance efficiency obtained. The technical efficiency also further decomposed into pure technical efficiency and scale efficiency to determine the source of inefficiency of the district by using inputs and output mix. Results found that the commercial bank of Ethiopia Adama district branches on average they are relatively technically inefficient in utilizing inputs under intermediation approach. It also fund the main source of technical inefficiency of the district originate from scale efficiency. This means the district better in management of input and output mix.