Malmquist productivity and efficiency analysis for SHG linked banks in Puducherry - A comparative study

Many SHGs and its members account has been linked with the bank for promoting financial inclusion and financial literacy for the rural women. Through bank linkage programme, self-help groups can easily access for bank credit to meet their requirements. This present study has been carried out with the specific objective of analysing the banking in the study area. The annual data for the period from 2015-16 to 2023-24 has been used to analyse the productivity improvement of the SHG linked banks with number of staffs, capital, deposits and operating expenditure as input variables and income and loan disbursement amount to SHGs as output variable using DEA model. The application of Malmquist DEA methods to panel data to estimate total factor productivity change, technology change, technical efficiency change, pure efficiency and scale efficiency change. The Self Help Group – Bank Linkage Programme has an ample of scope to develop and enhance the financial literacy of the rural women. The efficiency of the bank will ensure the outreach of the microcredit, managerial aspects, input-output proportionality and profitability of the institution.

⓿ There is an increasing retur to scale for total factor productivity in overall period.

⓿ No change in improvement has been revealed in the pure efficiency change for both the banks.

⓿ The productivity of co-operative bank was higher than that of regional rural bank in Puducherry.

⓿ Regional rural bank has constant returns to scale in technical efficiency, pure and scale efficiencies.