Efficiency Evaluation of Loans to Small Scale Enterprises in Iran's Provinces: A Nonparametric Approach

Efficiency in economic literature is defined as maximum output from definite amount of input or minimum input from definite amount of output. To measure the efficiency, two methods are generally used. They comprise parametric and non parametric methods. In this paper, non parametric method based on mathematical programming methods is used to evaluate the efficiency of entrepreneurs in the provinces of Iran in 2006. The non parametric method is employed based on two assumptions of constant and variable return to scale. The findings show that based on the first assumption, the provinces of Ilam, Khoozestan, Sistan & Baloochestan, and Kordestan is respectively ranked to be the first and the last efficient provinces. In addition, considering the second assumption, west Azarbayejan, south Khorasan, Khorasan Razavi, nourth Khorasan, Fars and Ghom provinces joins to the efficient provinces.