CHAPTER-3 RESEARCH METHODOLOGY

Transcription

1 CHAPTER-3 RESEARCH METHODOLOGY This Chapter presents the details of research methods used in the study. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. The methodology provides the various steps that are generally adopted and the logical connection between the research problems. This section present in the chapter Scheme describe the basic methodological aspects of the present study as well, describe the data used for the study, which include type of data, data collection, and questionnaire, and includes the details pertaining to the Relevant Research tools used for the study. The sampling method, method of collecting data, statistical tools and the reasons for choosing personal interview have also been explained in this chapter Understanding the issue 3.2. Pre-study 3.3. Primary and Secondary data 3.4. Instrument of Survey 3.5. Sample Design 3.6. Pre-Testing Phase/Validation of questionnaire Tabulation and Statistical Analysis 3.1 Understanding the Issue The research has started by understanding the concepts of microfinance and how it has started and developed, SHG involvement in microfinance and NABARD 107

2 support for the development of microfinance in rural India to be more precise its impact in Gulbarga which stands as an important area in Karnataka where microfinance development need to happen a lot. The organizations involved in microfinance in the interiors of Gulbarga had to be studied. Hence secondary data analysis was very essential Pre study Microfinance is that part of the financial sector which comprises formal and informal financial institutions, small and large, that provide small-size financial services in theory to all segments of the rural and urban population, in practice however mostly to the lower segments of the population. Several organizational books and manual were referred to understand the details. Many MFI s were contacted and it is identified the study in Gulbarga is necessary Primary and secondary data As the topic is of a recent origin, both primary and secondary data is essential to make effective evaluation of Microfinance in poverty alleviation. The study is an empirical one based on sample survey method. The study is basically dependent on primary data. The required primary data was collected by means of a questionnaire distributed in Gulbarga division. The secondary data was collected from the national and international E-journals, Research articles, books and reports published by RBI, NABARD, and Newspapers etc method. The sampling method used in the research is stratified random sampling 108

3 Research study will be conducted with structured questionnaire by interviewing the managers of microfinance banks and questionnaire is designed for Microfinance Clients. The type of research to be used for the study would be Survey Research Technique. Primary data collected from the sample of clients from Microfinance institutions by adopting simple random sampling method through structured questionnaire. An initial pilot study was run for pre- testing the questionnaire. The questionnaire has been edited in the light of the result of the pilot survey. The reframed and modified questionnaires were used for the survey.. Observation method was used to gain first hand insights into various aspects of Microfinance Industry Instrument of survey The instrument had five parts the first one was Respondents profile. This part questions about the Age, Sex, Educational qualification, Number of family members, purpose of loan, and Family Income of the respondent and the questions were set to nominal scale multiple-choice type. The second part of the instrument was prepared to understand the satisfaction of MFI services. The third part of the instrument deals with food related indicators. In the fourth part dwelling related indicators were dealt. Asset based indicator and Economy based indicator were asked in the further part of the instrument. The questions were set in interval scale Sample Design- Gulbarga is one of the largest districts in Karnataka and covers about 8.46% of the State s total area. The district economy is dominantly agricultural in its nature and nearly 75%of populations living in rural areas are dependent on agriculture. 109

4 Gulbarga district is backward and nearly 40% of rural populations are away from banks. Therefore, informal credit delivery system plays very important role in the Gulbarga district The sample is designed such that the study is NOT representative of any one MFI but represents responses of MFI clients in Gulbarga as a whole. Microfinance clients from Microfinance Institutions located in Gulbarga Division i.e from,s.k. S. Microfinance Institute, SpandanaSpoorthy Microfinance,Share Microfinance Institute,L& T Microfinance Janalaxmi,GrameenaKoota,Outreach Microfinance,HDFC Microfinance and Samruadhi Microfinance are selected for study purpose. In Gulbarga there are 10 blocks and 10 SHGs centers. 62 Non- Governmental. Organization (NGOs) is participated in the forming of groups. There are 212 bank branches operating of which 156 branches participating in bank linkage programme. DCC bank (District Central Cooperative Bank) and KGB (Krishna Grammena Bank) worked as SHPI (Self Help Promoting Institutions). (Source: Potential linked credit plan, ) Determining the sample size is a difficult task. In general, the more precise the required information has to be the bigger the sample size should be. Statistical approaches based on confidence intervals can also be used in setting the appropriate sample size. In the literature, a rough range of is suggested for a typical sample size. (Malhotra & Birks 2000, ).For this study the researcher selected 485 respondents as sample size 110

5 The total samples selected for the study was 485 respondents. Respondents were selected randomly irrespective of age, education and income level. Respondents are selected from Gulbarga district. The actual study was based on the empirical evidence gathered from 485 respondents. I have distributed 700 questionnaires.questionnaires were given to respondents during their leisure hour so as to not disrupt their daily routine. Researchers collected completed questionnaires from the respondents at the end of the week. A 74 per cent response rate was achieved (518 questionnaires). Of questionnaires returned, 485 were deemed usable for further analysis Pre-testing phase /Validation of the questionnaire After the preparation of the instrument a pilot study was conducted with 50 customers. Through this pilot study modifications and corrections were made in the construction of sentences and certain questions, which were repetitive, were edited. Validation of the Questionnaire The study uses structured questionnaires for the collection of primary data on perception of Micro-financial services and role of MFI in selected research area. They were validated after the pilot study and the Cronbach s Alpha scores for each questionnaire were found as follows: 111

6 Table-3.1: Cronbach s Alpha Scores Questionnaires Items Gulbarga No of Items Social and Economical Parameter Service Satisfaction Asset based Indicator Cronbach s Alpha Scores (Validation of the Questionnaire) 1. Social and Economical Parameters: This is one of the most important elements in understanding the impact of MFI in Rural Development. Validation results show that Cronbach s Alpha Scores is.866 which is highly satisfying scores to carry on the research in right direction. 2. Service Satisfaction : The another important factor is Service satisfaction which is showing.822 Cronbach s Alpha Scores which is also highly satisfying to go ahead with the selected questionnaires items. 3. Asset based Indicator: This indicator is showing the difference in assets creation before and after Micro financial services introduced to sample population. Cronbach s Alpha Scores is.783, is quite convincing in understanding the items selection for questionnaire. 112

7 3.7. Tabulation and statistical Analysis The responses observed for each of the items in the questionnaire were scored and tabulated into a master sheet. The statistical tools included chi square test, t-test, and Correlation. The analysis was done using SPSS package. The study used statistical tools like tabular method, percentage method, growth index, chi square test and also presented in the form of bar graph, pie diagram and line graph for meaningful interpretation of primary data. Pearson Chi-square. The Pearson Chi-square is the most common test for significance of the relationship between categorical variables. This measure is based on the fact that we can compute the expected frequencies in a two-way table (i.e., frequencies that we would expect if there was no relationship between the variables). The first step in the chi-square test is to calculate the chi-square statistic. In order to avoid ambiguity, the value of the test-statistic is denoted by 2 rather than 2 (i.e. uppercase chi instead of lowercase); this also serves as a reminder that the distribution of the test statistic is not exactly that of a chi-square random variable. However some authors do use the 2 notation for the test statistic. An exact test which does not rely on using the approximate 2 distribution is Fisher's exact test: this is significantly more accurate in evaluating the significance level of the test, especially with small numbers of observation. The chi-square statistic is calculated by finding the difference between each observed and theoretical frequency for each possible outcome, squaring them, dividing each by the theoretical frequency, and taking the sum of the results. A second 113

8 important part of determining the test statistic is to define the degrees of freedom of the test: this is essentially the number of observed frequencies adjusted for the effect of using some of those observations to define the "theoretical frequencies". Correlation Correlation is a statistical measurement of the relationship between two variables. Possible correlations range from +1 to 1. A zero correlation indicates that there is no relationship between the variables. A correlation of 1 indicates a perfect negative correlation, meaning that as one variable goes up, the other goes down. A correlation of +1 indicates a perfect positive correlation, meaning that both variables move in the same direction together. Pearson's correlation coefficient between two variables is defined as the covariance of the two variables divided by the product of their standard deviations. Independent sample t test The t-test is the most commonly used method to evaluate the differences in means between two groups. The t-test can be used even if the sample sizes are very small, as long as the variables are normally distributed within each group and the variation of scores in the two groups is not reliably different. The normality assumption can be evaluated by looking at the distribution of the data performing a normality test. The equality of variances assumption can be verified with the F test. Finally data analyzed were interpreted to draw the inference and reported with the objective of the study in view. 114