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October 20, 2025

Evaluating the Efficiency of Indian Public Sector Banks in Promoting Financial Inclusion Through SHG-BLP: A DEA Approach

Key Points

The CCR model identified two consistently efficient banks over the study period, indicating targeted success in financial inclusion.
Under the BCC model, five banks were identified as consistently efficient, signifying differences in operational performance.
A significant variation exists between the top and bottom 50% of banks, as determined by the Mann–Whitney U test on mean efficiency.
Only four out of the 12 public sector banks were found efficient, highlighting the need for others to enhance their services to self-help groups.

Abstract

The present study examines the efficiency of 12 public sector banks (PSBs) in ensuring financial inclusion (FI) through the Self-Help Group-Bank Linkage Programme (SHG-BLP). Data envelopment analysis (DEA) is applied for the periods 2011–2012 to 2021–2022 for this purpose. The study incorporated the Charnes, Cooper and Rhodes (CCR) and Banker, Charnes and Cooper (BCC) models. The findings suggest that with the CCR model, two banks, and with the BCC model, five banks are found to be consistently efficient throughout the study period. Furthermore, the Mann–Whitney U test clarifies that, based on mean efficiency under both models, a significant variation exists between the top 50% and bottom 50% of the banks. Additionally, the projection and shortfall analysis indicate that only four out of the 12 banks are efficient. Therefore, the comprehensive information, as an outcome of the study, proposes that the banks which were not found efficient should expand their financial services to the self-help groups (SHGs).

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Evaluating the Efficiency of Indian Public Sector Banks in Promoting Financial Inclusion Through SHG-BLP: A DEA Approach

Key Points

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