Efficiency of lending to natural persons and legal entities by banks of Ukraine: methodology of stochastic frontier analysis

Abstract

The presence of the negative influence of various environmental factors on sustainable functioning of banks requires continuing monitoring of key banking areas. In consideration of this, the article analyzes the efficiency of lending to natural persons and legal entities by domestic banks with the use of the methodology of the stochastic frontier analysis. A comprehensive approach to estimation of the efficiency of bank lending, which takes into account several time periods in banks functioning during 2008 – 2012 and the division of domestic banks into separate groups, is the characteristic feature of the method suggested in the article.