Analysis of The Efficiency of Sharia Rural Banks on East Java Province in 2020-2021
Vira Alifia Almanda (a*), Nisful Laila (b)

a) Faculty of Economics and Business, Universitas Airlangga
Jalan Airlangga No. 4-6, Surabaya 60286, Indonesia
*vira.alifia.almanda-2018[at]feb.unair.ac.id
b) Faculty of Economics and Business, Universitas Airlangga
Jalan Airlangga No. 4-6, Surabaya 60286, Indonesia

Abstract

This study aims to determine the efficiency of BPRS in East Java Province in 2020-2021. This study was based on quantitative research using Data Envelopment Analysis (DEA) method with intermediation approach. . Input variables used are total financing, third party funds and operating expenses. Meanwhile, theoutput variables that being used were total revenue. Output-oriented efficiency measurements were used in this study, assuming Constant Return to Scale (CRS) and Variable Return to Scale (VRS). The results of this study show the value of the efficiency of BPRS in East Java province fluctuates every quarter. This study found that there is no BPRS that has a value of 100% efficient in the vulnerable period of the study. The results of DEA using CRS assumption, there are 5 of 21 BPRS (23,8%) have reached the maximum efficiency value of 1. While using the assumption of VRS there are 9 of 21 BPRS (42,8%) ever achieve maximum efficiency in the form of 1. The average value of BPRS efficiency assuming CRS is 0.66 and VRS is 0.71. Overall, BPRS management can improve its efficiency by reducing operating expenses, and increasing total financing, third party funds, and operational revenue. Inefficiency BPRS can refer to 8 BPRS that have been efficient as a benchmark to achieve efficient targets.

Keywords: Efficiency, Sharia Rural Bank, Data Envelopment Analysis, Constant Return to Scale, Variable Return to Scale.

Topic: Islamic accounting, auditing, and performance changes