An Analysis of Operational Efficiency of Thai Specialized Financial Institutions
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Abstract
Thai Specialized financial institutions are important since they are established with the aim of providing services to people who cannot access the services from commercial banks. Measuring the efficiency of specialized financial institutions presents the operational efficiency and opportunities to improve their operations. The purpose of this research is to study the operational efficiency of six specialized financial institutions which have the bank status and play an important role in providing financial services to the people. The Data Envelopment Analysis tool is employed to measure the efficiency and the intermediation approach is applied in selecting inputs and outputs. The inputs are deposits, debt securities and borrowings, employee expenses and fixed assets. The outputs are loans and investments. The data are collected from the financial statements of each specialized financial institution. The results of this study present that specialized financial institutions have a high level of efficiency with an average efficiency of 0.985. The Export-Import Bank of Thailand, Government Housing Bank and Government Saving Bank have technical and scale efficiency. Bank for Agriculture and Agricultural Cooperative, Islamic Bank of Thailand and Small and Medium Enterprise Development Bank of Thailand have been able to improve their operations to have technical efficiency since 2017. Considering the scale efficiency, the Bank for Agriculture and Agricultural Cooperatives is a specialized financial institution that has scale inefficiency with too large production. Therefore, it should improve the operations by separating its departments to reduce the production scale to the optimal.
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