Analyzing Banks’ Efficiency in Distributing Credit (Loans) Using Data Envelopment Analysis (DEA) Method

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Just nine out of 42 Indonesian commercial banks achieved 100% efficiency in credit distribution during 2018-2022.
The input variables included third party funds and labor costs while measuring outputs like credit and interest income.
This observational analysis highlights inefficiencies in Indonesian banks, suggesting potential enhancements in operations.
Improving efficiency could involve increasing outputs or decreasing inputs for underperforming banks.

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Analysis reveals inefficiency in credit distribution among Indonesian banks, highlighting areas for improvement.

Dewi et al. (2025) studied this question.

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