A study of banking efficiency in Kenya using DEA

Abstract

The objective of the study was to investigate efficiency in the Kenyan banking sector, this was undertaken by identifying the mean efficiency levels of commercial banks as well as identifying the key determinants of efficiency. A sample of 19 commercial banks to which DEA was applied to determine the efficiency levels. The results show that though the banks were not fully efficient in all respects, they performed fairly well during the period under study. Small size banks performed better than medium and large banks during the period of study this implies that banks still have reason and scope to improve performance by improving their technology, skills and enlarging their scale of operations so as to be fully efficient.