What are the hidden microfinance challenges and solutions that impact performance in Gulu District? This study uncovers surprising insights into how Balanced Scorecard principles are applied, revealing critical weaknesses in innovation and growth that could reshape the future of microfinance institutions.
3.6 – Data Collection Methods
According to Strauss and Myburgh (1999), data collection is a process whereby a researcher meets the respondents and obtains data from them. Nxumalo (2001) asserts that the focus of the interaction should be to maximize validity and minimize inconvenience to the respondents before, during, and after the process. It was therefore the responsibility of the researcher to strike a balance between the requirements of the research and that of the respondents.
In considering data collection methods, there are numerous approaches to the task of gathering data needed in the examination of a problem. A common distinction is made between two different types of data, namely primary data, which consists of information collected through direct examination; and secondary data, which includes earlier examinations, existing statistics, literature, and articles. The researcher adopted mainly quantitative methods to collect data, although some qualitative data were also requested for at the end of each questionnaire designed for each specific objective of the study. Primary data was collected using questionnaires, while secondary data was gathered by means of documentary review.
3.6.1 – Primary data collection
Primary data, which formed the major component of this research, was obtained using self-administered questionnaires. Questions were made simple and relatively short but comprehensive. Questions were used to obtain detailed information about the respondents, and concerning the research questions and objectives of the study. The researcher sought permission from the managers or supervisors of the selected MFIs in order to obtain data, and the respondents of the respective MFI completed the questionnaires.
The respondents were allowed to fill the questionnaires themselves and care was taken to ensure that maximum responses were obtained. The advantage of this method was that, in case of misinterpretation, respondents could easily crosscheck to ensure accuracy. The researcher used both open ended and closed ended questions to avoid limiting the respondents’ views. In most of the cases, meaning of the item and instruction to fill up the questionnaire were given to the respondents. The questionnaires as shown in Appendix A were divided into three sections, as follows.
Section I contained customer background questionnaires, in which, the following biographical data were requested from the respondents, namely: gender, education, age, and length in years, they had been with the MFIs. In addition, type of loans received ability to repay the loans on time, satisfaction with the products or services offered by the MFIs, and satisfaction with the way they were treated whenever they visited the MFIs.
Some qualitative questions were also given, aimed at getting responses on how they would want the MFIs improve on the processes, procedures, products or services. Also on the impact, they had on their incomes and livelihoods in relation to the products and services offered to them. Another question was also put to get opinions on where else the respondents got financial services apart from where they had registered.
Responses to these qualitative questions were quantified into numbers, which were subject to statistical manipulations.
Section II, contained background of the organisations & employees, in which each employee was requested to give name of the organisation, year when the organisation started operating, the number of employees in the organisation, the status of the organisation, total number of males and females in the organisation, type of services being offered and how the organisation got their operational funds. Biographical details were also requested from the employees, which included age, educational status, position of responsibility, the period they had been with the organisation and the influence they had in decision-making.
Section III contained questionnaires related to the research objectives. In this section, structural questionnaires were used, which consisted of eight closed-ended questions, for each of the first three research objectives. Closed-ended questions were given which gave the respondents fixed responses from which to choose (Neuman, 2000). Each respondent had to respond to the questions or statements following numbers on an equal interval Likert’s scale, as follows: 1= Strongly disagree, 2 = Disagree, 3 = Undecided, 4 = Agree, 5 = Strongly agree. Some open ended questionnaires were also given at the end of each closed-ended questions also related to the first three objectives.
3.6.2 – Secondary data collection
Secondary data were collected through reviewing literature from textbooks, newspaper articles, policy documents, theses, and journals. The sources included among others, libraries, web sites, newspapers, published and unpublished sources.
In a research study, a literature review is crucial. It is one of the methods used for data collection. The literature review in a research study shares with the reader the results that are closely related to the study being undertaken. It relates a study to the larger, ongoing dialogue in the literature about a topic, filling in gaps and extending prior studies, and provides a framework for establishing the importance of the study, as well as a benchmark for comparing the results with other findings (Creswell, 1994).
Nxumalo (2001) asserts that before the researcher undertakes any empirical work in a quantitative study he/she should first make a careful study of the relevant literature. This would enable him/her to establish how much research has been done on the subject in question, what results were obtained, what type of problems were experienced by other researchers, which measuring instrument would be appropriate and so forth. In support of this assertion, Vockell and Asher (1995) maintain that by drawing upon published sources one can avoid reinventing the wheel. One can take advantage of what is already known and build upon the knowledge of others.
Le Compte and Preissle (1993) contended that, a literature review is critical to a research study because it is where the researcher gets an explanation of the theoretical underpinnings of the study. In addition, it is also argued that the purpose of a literature review is to relate previous research to the problem under investigation, by showing how a current or proposed study compares to previous investigations.
3.6.3 – Reliability of the research questionnaires
In the present study, the instrument was submitted to reliability testing after completion of data collection. The researcher calculated the Cronbach’s Coefficient Alpha scores, to test the reliability of the questionnaires, with specific reference to its internal consistency. It is the most widely used statistic for evaluating internal consistency, and its scores communicate reliability statistics.
It measures the extent to which the performance on any one item of an instrument is a good indicator of the performance in any other item in the same instrument (Brink, 1996). This was done to determine whether the researcher concentrated only on the one trait, which was measured in each individual section.
Table 3, indicates the Cronbach’s Coefficient Alpha scores of the three sections of the questionnaires related to the research objectives. The table shows that responses recorded in Table 22 were the most reliable, compared to results for Table 23, and Table 25.
Table 3 – Cronbach’s Coefficient Alpha Scores
| Cronbach’s Coefficient Alpha Scores | |
|---|---|
| Parameter/Criteria | Description/Value |
| Table 22 | Most reliable responses |
| Table 23 | Less reliable responses |
| Table 25 | Less reliable responses |
Source: Research data August 2007
3.7 – Data Analysis Methods
Upon collecting all the necessary data from the field, the questionnaires were reviewed for errors, inaccuracies, omissions, and inconsistencies and then edited accordingly. This was done to ensure that the information obtained from the respondents were accurate and consistent with the researcher’s objectives. The edited responses were translated into numerical terms through the coding exercise.
The exercise was simplified through the provision of the alternative answers. However, for questions that required elaboration, the researcher developed appropriate and meaningful classification to facilitate coding. The collected data, after editing and coding, were directly captured into the Statistical Package for Social Scientists (SPSS) Software. The required tables and charts were then generated and analysis done, mainly by means of descriptive statistical methods, and more scientific statistical methods such as correlation and regression analysis.
In analysing the general data specifically related to the customers and the employees, descriptive statistics was used, that involved frequency distribution tables, bar charts, and Pie charts where specifically required. On the other hand, in analysing the data related to the objectives of the research, descriptive statistics was also used, that involved frequency distribution tables. In addition, since the questionnaires involved Likert scales, and Likert items are treated as ordinal data, the responses were manipulated to involve average values, which are considered, continuous variables. Analysis was then done using Pearson correlation, linear regression, and curve estimation regression techniques.
3.8 – Limitations to the study
The researcher inevitably encountered some limitations or difficulties during the period of carrying out the research. First, given the limited period within which the researcher was expected to present the report, the duration of the study was too short, and more so because of the tight University programme. However, the researcher had to budget his time appropriately to beat the deadline.
In an attempt to obtain the required information for the study, the researcher got a great barrier because of the fear some of the managers or supervisors of the selected MFIs had, in providing the information either through their clients or through their employees. So, many of them did not cooperate at all and therefore refused to allow their staffs or clients to fill the questionnaires.
Some of them restricted the number of respondents, and the number obtained was less than what the researcher had proposed. The researcher equally spent heavily on transport costs, phone calls, typing, printing, photocopying, stationeries, and others despite limited financial resources. In addition, instead of getting two research assistants as was proposed, only one research assistant was employed for data collection.
3.9 – Conclusion
A quantitative research was conducted to determine the views of the customers and employees of the selected MFIs with regard to various aspects related to the evaluation of the performance of the MFIs using the balanced scorecard. The respondents were invited to indicate their views on the research topic. Data was collected by means of structured questionnaires comprising mainly of closed ended questions, although open-ended questions were also administered. The raw data was submitted to descriptive and more scientific statistical analysis. The researcher employed various measures to enhance data quality and ensure that ethical principles were complied.
Frequently Asked Questions
What data collection methods were used in the evaluation of microfinance institutions?
The researcher adopted mainly quantitative methods to collect data, using self-administered questionnaires for primary data and documentary review for secondary data.
How was primary data collected for the study on microfinance institutions?
Primary data was collected using self-administered questionnaires, which included both open-ended and closed-ended questions to gather detailed information from respondents.
What types of information were requested in the questionnaires for the microfinance study?
The questionnaires requested biographical data such as gender, education, age, and length of time with the MFIs, as well as information on loan types, repayment ability, and satisfaction with products and services.