Abstract
This is a study of the estimation of rural bank efficiency in Bali Province Indonesia in the new era of financing policies on micro and small businesses and the development of financial technology during the period of 2012-2017. The study employs data envelopment analysis in estimating the efficiency of those rural banks in the region. The findings of this study reveal a decrease in average technical efficiency of rural banks in Bali over the period. Local government-owned banks experienced a greater decline than private banks. Inferential findings reveal that bank profitability, loans, operating costs, general and administrative expenses, bank size, and inflation rates are important factors in explaining the performance of rural banks' efficiency in Bali Indonesia. These findings bring several implications for rural banks' management to consider establishing internal policies as well as anticipating the environmental variable in terms of inflation rate in increasing their technical efficiency.
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