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

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).