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How Well Have Social Economy Financial Institutions Performed During the Crisis Period? Exploring Financial and Social Efficiency in Spanish Credit Unions

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As Social Economy financial institutions, credit unions have traditionally been considered less efficient than traditional banking entities. However, like banks and savings banks, they have to be as efficient and competitive as possible to survive in today’s business environment, especially at times of crisis. To date, there have been very few studies on their efficiency and practically none for the crisis period. Moreover, almost all the existing studies assess only financial efficiency, without considering their social function. This study examines the levels of both financial and social efficiency in Spanish credit unions as well as their main determinants during the recent crisis. We apply the two-stage double bootstrap data envelopment analysis (DEA) methodology based on panel data corresponding to all the credit unions active in Spain between 2008 and 2013. The empirical results indicate that financial and social efficiency achieved an acceptable level, although on average the former was slightly greater than the latter. We also find that both age and merger and acquisition activity were positively influential on the financial efficiency of credit unions but had a significant negative effect on their social efficiency. Moreover, the regional location of such entities and the financial crisis were also crucial determinants of both types of efficiency. Our findings are therefore useful for all the stakeholders of credit unions to know if these entities have been efficient according to a double bottom line accounting in the crisis period and hence to maintain successful social management that is compatible with satisfactory financial efficiency.

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Fig. 1

Source: Drawn up by the authors with data from Asociación Española de Banca (2008–2013), Confederación Española de Cajas de Ahorros (2008–2013) and UNACC (2008–2013). All data come from individual Financial Statements

Fig. 2

Source: Drawn up by the authors with data from UNACC (2008–2013)

Fig. 3

Source: Drawn up by the authors

Fig. 4

Source: Drawn up by the authors


  1. 1.

    The minimum acceptable value for technical efficiency indicators is 50 % (Cooper et al. 2007).

  2. 2.

    Paradoxically, although there is no empirical evidence on the social efficiency of credit unions in developed countries, there have been many recent studies on this subject for microfinance institutions—MFIs—working in developing countries (Servin et al. 2012; Piot-Lepetit and Nzongang 2014; Wijesiri et al. 2015, among others). Microfinance institutions are credit entities that also have an important social role, mainly in poorly-developed countries where they give loans to social groups that are excluded from the traditional financial system. It is precisely the loans policy of such entities that prevents the existing evidence on their social efficiency from being transferred to credit unions.

  3. 3.

    This procedure is performed using FEAR software (Wilson 2008).

  4. 4.

    The “constant returns to scale (CRS) DEA model” was proposed by Charnes et al. (1978) and is only appropriate when all organisations operate at an optimal scale, which is difficult because of the existence of imperfect competition, government regulations, constraints on finance, etc. For this reason, Banker et al. (1984) proposed the “variable returns to scale (VRS) DEA model”.

  5. 5.

    See Wilson (1993, 2010) for details.

  6. 6.

    Conventional DEA, which is applied in all prior studies on the efficiency of credit unions, gives the values for original efficiency without taking into account any sample noise in the estimates, so the results may be misleading.

  7. 7.

    We also estimated the efficiency score for 2010 using a single efficient frontier for that year, obtaining an average value of 78.2 % in comparison with 91.5 % obtained by Belmonte (2012). However, the relative estimates obtained in our study by building a single efficient frontier for the 6-year study period project a more realistic and reliable image of the efficiency of Spanish credit unions during the recent crisis period.



Data envelopment analysis


Unión Nacional de Cooperativas de Crédito (National Union of Credit Unions)


Small and medium-sized enterprises


Stochastic frontier analysis


Decision making unit


Constant returns to scale


Variable returns to scale


Gross domestic product












Security investments


Customer socialisation


Financial inclusion


Social fund contribution






Merger and Acquisition activity


Corporate group


Regional location




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Correspondence to Almudena Martínez-Campillo.

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Martínez-Campillo, A., Fernández-Santos, Y. & del Pilar Sierra-Fernández, M. How Well Have Social Economy Financial Institutions Performed During the Crisis Period? Exploring Financial and Social Efficiency in Spanish Credit Unions. J Bus Ethics 151, 319–336 (2018). https://doi.org/10.1007/s10551-016-3192-9

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  • Credit unions
  • Crisis period
  • Financial efficiency
  • Social Economy financial institutions
  • Social efficiency