Abstract:
The most important aspect of running a business is how well you are running the business. An efficient business will show increased profitability with less input of resources. Therefore, to keep pace in an increasingly competitive world, a business needs to run as efficiently as possible, since any company not operating efficiently will be out of business. The key pillar of a successful economy is financial efficiency and therefore all the stakeholders in the economy should put it into consideration at all times to ensure stability in the financial sector. The purpose of the study was to investigate the Assessment of efficiency of savings and credit co-operative in Dire Enchini Woreda. The study used descriptive research design. The population of the study comprised 21 saving and credit cooperatives in Dire Enchini Woreda from which a sample of 16 active saving and credit cooperative was selected purposively. The secondary data in this analysis covered a period of 5 years from 31st December 2015 to 31st December2019 extracted from the audited financial statements of comprehensive income statement and statement of financial position. Data Envelopment Analysis was used to measure operational efficiency of the saving and credit cooperatives. The data collected was then analyzed using a Data Envelopment Analysis to test the extent of relationship between Dependent and Independent Variable. The study find out that factors influencing the efficiency of saving and credit cooperatives in Dire Enchini Woreda which are Size, Capital, Credit Risk and Management quality of saving and credit Cooperatives societies. They either influenced it positively or negatively. The study concludes that size, capital and Credit Risk positively and significantly influenced efficiency of saving and credit cooperatives while Management quality (Non-interest expense/total asset) inversely affected efficiency of saving and credit cooperatives. Because of weak financial position of saving and credit cooperatives, the study recommends that top talent managers and accounting clerks that have competence in financial management should be hired. The study also recommends that saving and credit cooperatives managers and members should be keen on those inputs variables that contribute to inefficiencies
