A DEA‐model evaluation of the efficiency of peasant household credit investigation system in rural credit cooperatives: A positive research in Hubei Province, China

Abstract

Purpose

As a major agricultural province in central China, Hubei Province mainly carries out the peasant household credit investigation system through rural credit cooperatives (RCCs). The purpose of this paper is to evaluate the efficiency of the peasant household credit investigation system in Hubei RCCs and provide some evidence and ideas to the formulation of relevant policies.

Design/methodology/approach

First, this paper briefly reviews the related literature of the efficiency in credit investigation system; second, the paper gives a brief description of the data envelopment analysis (DEA) model and designs the indicators for efficiency evaluation; third, the paper accounts data sources and processing methods; and finally, the paper performs the empirical analysis and draws a conclusion.

Findings

The paper finds that the efficiency of the resource allocation in both regions is unoptimistic, the general efficiency is somewhat low, and it shows the trend of declination. The efficiency of pure technology in two regions represents the adverse trend. Every year's average scale efficiency in both regions is higher than the pure technology efficiency.

Originality/value

The main contributions of this paper include the first use of DEA model to practically evaluate the efficiency of credit investigation system based on 54 samples of RCCs in Hubei Province and the horizontal and vertical comparisons of the results. The conclusions of this paper not only make the efficiency of credit investigation system in the province's 54 credit cooperatives comparable but also has a great application value to the actual decision‐making departments in formulating credit policies, and each credit cooperative in further building the credit investigation system according to its own conditions. Moreover, it has certain reference value to other similar studies.

Citation

Xiong, X., Tian, J. and Ruan, H. (2011), "A DEA‐model evaluation of the efficiency of peasant household credit investigation system in rural credit cooperatives: A positive research in Hubei Province, China", China Agricultural Economic Review, Vol. 3 No. 1, pp. 54-66. https://doi.org/10.1108/17561371111103543