Efficiency And Productivity Analysis Of Togo Banks

In the last fifty years, the banking sectors of Togo, as of many other countries, have been subject to globalization, deregulation and liberalization. In Togo, the financial sector has an important role to play in the economic development process. Financial institutions are the main intermediation channels between saving and investment in the country. Financial intermediaries allow mobilizing saving from diverse sources and allocating to more productive activities, what benefits not only investors and beneficiaries of the investments, but also the whole economy. A general view on the strategic of some Togolese banks shows that there are having low productivity due to the lack of management skill as compared to the others countries banks. Most of the studies dealing with bank efficiencies evaluate the efficiency of American, European and Asian Banks. Nevertheless, a few of these studies focuses on Africa, especially none of those studies focuses on Togo so far. Apart from that, it is of great theoretical and practical significance to research on the efficiency and productivity of Togolese banks.Data envelopment analysis (DEA) has now been widely used considering that it has the advantage to allow the DMUs to have full freedom to select their weights, which are most favorable for their assessments to achieve the maximum efficiency score. This thesis examines the impact of financial liberalization on the efficiency of Togolese banks in the period2000-2008which corresponds to the post financial liberalization in WAMU zone and a changed banking and financial environment. The aim of this paper is to check whether the financial liberalization increased the efficiency and productivity of commercial banks in Togo. This thesis develops a new combined Malmquist index based on "P-index Ⅱ" in order to estimate the total factor productivity growth and its components and employs it to investigate technical efficiency, scale efficiency and productivity changes. Among the13banks which operate in Togo over the period2000-2008, we selected7due to data availability.The empirical results show that the total factor productivity has considerably increased for the whole industry, in which technical change is found to be a more important source of productivity growth to Togolese banks compared to technical efficiency change. The analysis of the growth according to the size of the banks shows that the size of the banks seems to be a less important determinant of the bank’s productivity performance. In line with this, it is indicated that the financial liberalization does not improve the technical efficiencies of banks in Togo on a whole.