Technical efficiency of a rural bank's branches in Davao Region: a data envelopment approach

Abstract

This study evaluates the technical efficiency of rural bank branches using Data Envelopment Analysis (DEA) to identify operational inefficiencies and recommend improvement strategies. Utilizing data from 21 branches over three consecutive years, the study benchmarks efficiency levels through the BCC model, focusing on personnel, floor space, and technology usage. Results revealed consistent inefficiencies in several branches, which could be addressed through targeted resource augmentation and process optimization. Efficient branches, such as Calinan and Mintal, emerged as benchmarks, offering actionable insights for enhancing overall branch performance. Recommendations include strategic investments in infrastructure, personnel training, and the replication of best practices to improve service delivery and align with stakeholder expectations. This study provides a framework for operational improvements that contribute to long-term sustainability and customer satisfaction in rural banking.