Staff Productivity, Cost of Average Net Portfolio and Portfolio Yield: Special Reference- to Rural Banks in Jaffna District

Abstract

Most of the organizations including service organizations carry out the business activities through achieving profit. The profit can be enjoyed through maximizing revenues or minimizing expenses .This depends upon the staff productivity. In a way, the researchers analyze the impact of the staff productivity and cost — average net portfolio on portfolio yield in rural banks located in Jaffna district. Number of active loan clients to number of staff members, number of active loan clients to number of loan officers and gross portfolio outstanding per loan officers are used to measure the staff productivity. Operating expenses to average net portfolio and revenue from loan portfolio were computed to measure the cost — average net portfolio and portfolio yield respectively. Out of thirty four branches of co-operative rural banks in Jaffna district, twenty branches were selected for the study during the period of 2002 - 2006. The study concluded that there is no relationship between cost of average net portfolio and portfolio yield. Further, there is no relationship between staff productivity such as clients to staff members, clients to loan officers, gross portfolio outstanding and portfolio yield. However, the impact of staffproductivity shows a lesser impact on portfolio yield. Out of the above three staff productivity ratios, gross portfolio outstanding per loan officer shows the considerable contribution to portfolio yield.