Evaluation Of The Efficiency Of Rural Banks In China Based On DEA Method

March1,2007, the start of China’s first rural bank marked the pilot work of newrural institutions in China officially launched, the new type of rural institutions are set upto make up for gaps in the rural financial services, after six years of development, thenew rural financial institutions in rural bank as the representative to become the mainforce to promote the development of rural economy in China, more and more experts andscholars pay attention to it, and they think during the "Twelfth Five-Year Plan", the newrural financial institutions will develop themselves from the direction of saving cost,expanding performance, improving the efficiency. With the rapid development of thevillage bank, it also appeared a series of problems such as the competitiveness offinancial service, the imbalance of overall layout, service tenet deviation of "three rural ",the "main originator system" regulated at the beginning of the establishment also has alot of problems, and be questioned. Operational efficiency is an important standard toevaluate the quality of enterprise development or the industry as a whole, a series ofproblems such as how the development of village banks and what are the factorsinfluencing its operation efficiency, become the focus of attention in the development ofvillage bank. Therefore, from the aspects of village banks, such as operating conditionsand regional distribution, and originators as starting points, this paper analyses thecurrent development of China’s rural bank, found problems in the development of ruralbanks, at the same time, using the DEA method it measured the efficiency of samplesvillage banks, to provide a reference for the development of China’s rural bank.The first part, the theoretical basis and the DEA method researchment to evaluatethe efficiency of China’s rural bank.On one hand, it analyses the relevant concepts of village banks and financialefficiency theory elaboration systematically detailedly, it finds out the characteristics offinancial efficiency evaluation; On the other hand, through a comparative analysis ofmany methods to measure bank efficiency, DEA method is selected as the best method toevaluate the efficiency of the village bank, and it systematically illustrates the basictheory of DEA method, the basic models and DEA effective economic meaning. Analysis of these two aspects provides a theoretical basis for descriptive statisticalanalysis and Construction of index system and model of DEA empirical analysis.The second part, descriptive statistical analysis of village bank development inChina.From the number and area distribution, business development and the originatorthese three generous aspects, the development of China’s rural banks is descriptivestatistical analyzed. According to the current situation of the development, it exploresthat there is a serious of problems in the operating of China’s rural banks, such asshortage of financial services capabilities, the imbalances of overall layout, part ofvillage banks’ deviation from supporting track, the hidden dangers existence of “the mainsponsor system”, the coexistence of many risk problems.The third part, the construction of index system evaluating of village bankefficiency based on the DEA method.Based on the existing research on the index system of commercial bank efficiencyevaluation, combined index selection principle and operating characteristics of thevillage bank itself, taking into account the village bank service for agriculture purpose, itconstructs village bank efficiency evaluation index system based on the DEA, taking thenumber of employees, annual core capital, the number of institutions, savings and thelargest banking financial institutions shareholding ratio as input indicators, loan balanceand net income as output indicators, the construction of index system provides the indexsystem for the empirical analysis of China’s rural bank efficiency based on DEA method.The fourth part, the empirical analysis of China’s rural bank efficiency based onDEA method.Taking15village banks established in6pilot provinces in2007as a sample,selecting data from2008to2011four years, it empirically analyses the sample’sefficiency using DEA method and laterally and longitudinally analyses the efficiency ofvillage banks，then it measures village bank is effective technology or not and analysesthe sources of invalid village bank technology, providing the starting point and directionfor countermeasures to promote the healthy and rapid development and improve thecompetitive ability.The fifth part, the suggestions to promote the development of China’s rural bank.This part puts forward countermeasures and suggestions from the related facilitiesconstruction such as constructing and optimizing government environmental supportsystem, establishing and perfecting the supervision system of village banks, improvingthe financial service and optimizing equity structure, to provide reference for thesustainable development of China’s rural bank.