Measuring Performance of Thai Credit Union Cooperatives using Slacks-Based Measure of Efficiency
The first cooperative of Thailand was established in 1916 under the main objective to be the source of funds for the cooperative members. In August 2005, credit union cooperatives were separated from savings and credit cooperatives and classified as a new type of cooperative in Thailand. Since then, business transaction of credit union cooperatives grew significantly, and its volume of business transaction was ranking third after the saving cooperative and agricultural cooperative. The aim of this research is to find an appropriate benchmark model by proposing non-parametric efficient frontier approach called Data Envelopment Analysis (DEA) as an alternative method to evaluate the performance of credit union cooperatives in Thailand. Additionally, the sources of inefficiency in the Credit union cooperatives and potential improvements will be investigated. The financial data of 50 large credit union cooperatives during 2013 to2017 were collected from the databases of Cooperative Auditing Department, Ministry of Agriculture and Cooperatives of Thailand. The slacks-based measure model comprise of 2 inputs and 3 outputs, according to production approach, were used to estimate technical efficiency. The primary results show that performance of the credit union cooperatives constantly declined from80.94percent in 2013 to 63.83 percent in 2017,on average.The major output slacks that should be concerned is shortage of deposit, which was increasing over the period of study. This may cause by a panic of the Klongchan credit union cooperative collapse. Then, depositors moved their funds to commercial banks, which were guaranteed by Deposit Protection Agency. The results are comparable to literature, which shows a deterioration of the credit union cooperative efficiency over the last decade. This may raise attention from both policy makers, and regulators to look after the credit union system seriously.
Keyword - Credit Union Cooperative, Data Envelopment Analysis, Performance Measurement, Slacks