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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/9266

Title: Measurement and determinants of cost efficiency among credit unions in the Gambia
Authors: Mendy, Francis
Issue Date: 14-Oct-2016
Abstract: The aim of this study was to measure and examine the determinants of cost efficiency among Credit Unions (CUs) in the Gambia from 2009 to 2013. A total of 50 CUs were sampled across the sector of financial cooperative credit unions using simple random sampling technique. Both secondary and primary data were collected from the NACCUG and some individual CUs for analysis. Cobb-Douglas cost frontier and cost efficiency ratios were estimated by employing the Stochastic Frontier Approach (SFA). Results from the study showed that credit unions in the Gambia are relatively young since they had been in operations for an average of six (6) years as at 2013. A typical credit union in the Gambia had 699 active clients who save and take loans from the institution periodically. The average savings balance was found to be GMD 8.38 million compared to average loan portfolio of GMD 6.96 million. The cost of operations for a typical CU in the Gambia rose by 10% from an annual average of GMD 252,000 in 2009 to GMD 278,000 in 2013. Number of active borrowers, personnel cost and gross loan portfolio were found to have significant positive effect on annual operating costs of CUs in the Gambia. Credit unions in the Gambia were found to be cost inefficient with average cost efficiency ratio of 90%. Factors that influence cost efficiency of CUs in the Gambia were found to be borrowers per field officer (BPF), depositors per staff (DPS), average loan balance (ALB), average savings balance (ASB) and age of the credit union. Age of CU was found to have a significant positive effect on cost efficiency in the Gambia due to the presence of a positive learning curve. The study rejected the null hypothesis of tradeoff between outreach and cost efficiency since the two were found to be complementary. To reduce cost inefficiency, the study recommended that CUs in the Gambia should improve on savings mobilization through the introduction of innovative savings products, among other things.
Description: A thesis submitted to the Department of Agricultural Economics, Agribusiness and Extension, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Master of Philosophy in Agricultural Economics, 2016
URI: http://hdl.handle.net/123456789/9266
Appears in Collections:College of Agric and Natural Resources

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