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The IUP Journal of Applied Finance
Circle-Wise Performance Evaluation: A Case Study of KSFC
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With the objective of reaping the benefits of both the smallness and bigness, large-scale organizations divisionalize their operations into a few segments (divisions, departments, etc.). After providing the necessary facilities and powers to these divisions, they are made accountable for the results. Hence, one can find a few accounting entities within each of such business entities. This is because of the reason that the overall performance of the organization depends on the performance of their segments, and this is true even in the case of banking and financial companies such as the Karnataka State Financial Corporation (KSFC). As the corporation has a vast geographical area (i.e., entire Karnataka State) to serve, it has 32 branch offices, and for operational purpose, the state is divided into four circles with 7-9 branch offices in each circle. The performance of corporation depends, to a greater extent, on the performance of its circles and their branch offices. Against this backdrop, the present paper makes an attempt to evaluate the performance of circles using six variables and the data for 10 years, 2007-08 to 2016-17.

 
 
 

Keeping in mind the valuable contribution of Micro, Small and Medium Enterprises (MSMEs) to the overall development of economy and also the financial problems of these enterprises, the Government of Karnataka (GoK) established the Karnataka State Financial Corporation (KSFC, corporation) in 1959. This corporation was established under Section 3 of the State Financial Corporations Act, 1951 on the lines of Industrial Finance Corporation of India (IFCI) established by the Government of India (GoI). This corporation (KSFC) has the entire state of Karnataka as its operational jurisdiction. For the purpose of proper management of its activities and business, it has divided the state into four circles, viz., Circle-I, Circle-II, Circle-III and Circle-IV (see Appendix for the list of districts and branch offices). Each circle has 7-9 branch offices [Circle-IV is the smallest circle with seven branch offices in seven districts, i.e., one branch office of KSFC at each district headquarters and Circle-III is the largest circle with nine branch offices of KSFC in nine districts]. The corporation has its branch office at the headquarters of each of 30 districts of Karnataka. However, in Bengaluru (Urban) district, the corporation has established three branch offices. Therefore, there are 32 branch offices of KSFC in 30 revenue districts.

 
 
 

Applied Finance Journal