Efficiency of credit unions in Brazil: an analysis of the evolution in financial intermediation and banking service


  • Department of Accounting Sciences, School of Administration and Accounting Sciences, Federal University of Mato Grosso
  • School of Economics Administration and Accounting of Ribeirão Preto, University of São Paulo
  • School of Economics Administration and Accounting of Ribeirão Preto, University of São Paulo
  • School of Economics Administration and Accounting of Ribeirão Preto, University of São Paulo


Credit unions, Efficiency, Financial intermediation, Banking services


Purpose – The purpose of this paper is to evaluate the efficiency in financial intermediation and the cost efficiency in banking service of credit unions in Brazil, based on essentially accounting variables, and to analyze the temporal evolution of the efficiency of these cooperatives.

Design/methodology/approach – With a sample of 315 cooperatives over the period from 2007 to 2014, this research uses a two-stage process: application of regression models with panel data to verify which variables are related to the defined outputs, with the reduction of 31 variables to 8 variables in both models; and application of the data envelopment analysis method to obtain an analysis of credit unions’ efficiency.

Findings – The results demonstrate a high level of efficiency in financial intermediation, with low variation over time, associated with a low efficiency in the banking service, in which few cooperatives have remained efficient over time. In addition, the cooperatives with highest efficiency in financial intermediation were also the most efficient in providing services.

Research limitations/implications – This research has some limitations about the capacity of the proxies used to capture the real effect of the variables and assumptions of economic relations resulting in restrictions to generalize the results.

Practical implications – Cooperatives are usually analyzed under just one dimension. By separating the analysis into financial intermediation and banking services, cooperatives that are more efficient in each dimension can be identified, in addition to analyzing the evolution over time. The authors found that
efficiency tends to be lower in banking services, and few cooperatives remain at the highest level of efficiency over time in both models.

Social implications – Credit unions provide an important service in the banking and credit market. Therefore, understanding its operation and the characteristics that influence its efficiency allows a better management of the cooperatives themselves and a greater understanding of this important segment of the financial market.


Download data is not yet available.






Research Paper