Measuring Technical Efficiency of KSFE Branches

Measuring Technical Efficiency of KSFE Branches Sayooj Kumar K. P. Assistant Professor, Dept. of Economics, Sree Narayana Guru College, Chelannur, (sayoojkumarkp@gmail. com) 1. Introduction The Indian financial sector has witnessed the emergence of wide range of financial institutions over the year that caters to the economys diverse financial needs. The Non Banking Financial institutions (NBFIs) play a very important role among the financial institutions. A Nonbanking financial institution facilitates bank related financial services such as investment, contractual savings and market brokering. The NBFI along with the banking sector contribute to the inclusive growth and development of the economy by increasing the access to financial services, enhancing competition and diversifying financial sector among others. Kerala State Financial Enterprises is the only miscellaneous nonbanking financial institution in Kerala which runs chit business. KSFE was established by the government of Kerala in 1969 with the objective of providing an alternative to the private chit promoters in order to bring in social control over the chit fund business, so as to save the public from the clutches of unscrupulous fly-by-night chit fund operators. A most remarkable feature about KSFE is that all funds mobilized by it through its various deposit schemes and chitties are advanced wholly to the public in Kerala itself, where as other financial institutions and banks channel their deposits collected in Kerala for advance outside the state. KSFE is one of the most profit making public sector undertakings of the state. The efficiency of KSFE depends on the operation of a network of branches that act as the key contact point between KSFE and its customers. Efficiency measurement at branch level poses big challenges to KSFE because it is difficult to define and measure inputs and outputs of the branches. It is in this context the present study makes an attempt to measure the efficiency of branches of KSFE using data envelopment analysis (DEA)