Chapter 2
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Macro Research Project ‐2008‐09, IIBF, Mumbai
Chapter2 Methodology of the Study 2.1. Sample Design and Sample Size 2.1.1 Sample Design In view of the background and the objectives defined in Chapter-1 and the size of the population under reference, we have used sampling techniques and for this reason random number table was used for greater precision in the results of the study. In this connection the following samples has been studied:a) In order to draw conclusions about the feasibility of Business Correspondent/Business Facilitators as an improvised channel of inclusive growth, sample of both financially excluded and financially included districts in the state of Uttar Pradesh has been considered in the present study. b) Sample was also drawn from branches of different Public/Private Sector Banks and Regional Rural Banks operating in those randomly selected district (Banks under both the categories which have already implemented the Business Correspondent/Business Facilitator model and
which
have
not
yet
implemented
the
Business
Correspondent/Business Facilitator model). c) The sample was also drawn from the end users of branch banking facilities and the people who do not have any relationship with the formal financial system available from the rural and semi urban areas under those selected districts. 2.1.2 The sample design includes multiple steps in order to reduce response bias. This sampling design carried out in different stages involving more Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 8
Macro Research Project ‐2008‐09, IIBF, Mumbai
than one sampling method (multi-stage sampling). We used sampling designs that ensure the generalisability to the greatest extent possible, within a given geographical region. 2.1.3 This study aims at assessing the effectiveness of existing banking facilities vis-à-vis opportunities and challenges of Business Correspondent/ Business Facilitator model for greater financial inclusion in the State of Uttar Pradesh. Keeping in view the population size for the study and the multi stage sampling, the desirable sample size has been determined after setting the parameters of the study under reference. While setting the parameters we kept in mind that more varied the data are, the larger the sample size needs to be to arrive at an expected level of accuracy in generalising the results. Group sampling was also considered to ensure a balanced representation of the different categories of customers. 2.1.4 Sample size Stage –I: - Sampling of Districts Step-1: Subdivision of 71 districts in to 3 broad geographical regions Step-2:- Two (2) Cluster of Districts for each region a) Districts with High level of financial inclusion (>80%) b) Districts with Low level of financial inclusion (<80%)
Sl. No
1 2
Total Sample Size of the Districts: 3*2*2 = the Districts appended Districts of Districts of Eastern UP Central UP Name of Financial Name of Financial the Inclusion the Inclusion District (%) District (%) Mirzapur 88% Rae 89% Bareli Pratapgarh 87% Unnao 84%
3 Chitrakoot 78% Sitapur 79% 4 Banda 76% Jhansi 75% Source: SLBC, Bank of Baroda, Lucknow
12 Districts. The list of Districts of Western UP Name of Financial the Inclusion District (%) Pilibhit 93% Baghpat
91%
Badaun Rampur
78% 77%
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 9
Macro Research Project ‐2008‐09, IIBF, Mumbai
Stage –II: - Sampling of Banks While sampling the banks we have not considered the private sector banks as they are utilising the Direct Selling Agents (DSAs) as their representatives in their area of operation. We have considered the Public Sector Banks and the Regional Rural Banks. As a multiple variables we have also considered the Public Sector Banks those who have strong presence in the state of Uttar Pradesh. While selecting the Regional Rural Banks, we have considered their presence in the Economic zone we have subdivided. Step-1: Out of the Public Sector Banks operating in Uttar Pradesh those who have implemented BC/BF model for financial inclusion, we have considered two (2) Banks for the present study. They are Punjab National Banks and Syndicate Bank. Step-2: Out of the Public Sector Banks operating in Uttar Pradesh those who have not implemented BC/BF model for financial inclusion, we have considered two (2) banks. They are Bank of Baroda (SLBC Convener) and Allahabad Bank Step-3: We have also considered two (2) Regional Rural Banks (RRBs) keeping in view their importance Cluster of Banks in Uttar Pradesh those who have not implemented BC/BF mode for financial inclusion. They are Arayvarta Gramin Bank and Triveni Gramin Bank Total Sample Size: 4 PSBs + 2 RRBs = 6 Banks. The list of the banks appended Stage –III: - Sampling of Bank Branches Step-I: Cluster sampling of five (5) branches of the lead bank (identified Public Sector Banks) of each of the nine (9) districts. Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 10
Macro Research Project ‐2008‐09, IIBF, Mumbai
Step-II: Cluster sampling of five (5) branches of the Regional Rural Banks in each of the three (3) districts where they have the significant presence. Total Sample Size: 5 X 12 = 60 Branches. The list of the bank branches appended Stage –IV: - Sampling of Customers Step-I: Cluster sampling of ten (10) Customers of each five (5) bank branches surveyed in all the twelve (12) districts considered under the present study who have Bank accounts. Step-II: Cluster sampling of ten (10) people who do not have any bank account in the command area of each five (5) branches in all the twelve (12) districts considered under the present study. Total Sample Size: (5 X 5 X 12) + (5 X 5 X 12) = 600 Customers. 2.2 Segmentation of Districts in Uttar Pradesh for the research The state of Uttar Pradesh (UP) has been divided into 3 major economic regions – Eastern, Central and western. Although as per agro-climatic zone, the state has been divided into 9 parts. But for our research purpose we have considered only economic region. Eastern UP consists of 27 districts, Central UP consists of 22 districts and Western UP consists of 21 districts. (Shown in the map – Annexure-1)
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 11
Macro Research Project ‐2008‐09, IIBF, Mumbai
2.3 Data of Financial Inclusion The financial inclusion data of the state was studied from the SLBC reports available from the Office of convener bank (Bank of Baroda) at Lucknow and other public domain. We then listed out the magnitude of the financial inclusion of all the districts of the state. 2.4 Sampling of the Districts to be studied According to the magnitude of the financial inclusion the districts in each economic zone was divided into districts with high financial inclusion and with low financial inclusion. For this purpose we have considered 80% as the Benchmark achievement. After discussions with the NABARD and RBI Officials, it was decided to consider 4 districts in each of the three economic zones of the state. 2.5 Study of the formal Banking system in Uttar Pradesh As such we have studied the entire formal Banking system operating in the state of Uttar Pradesh from various available secondary data. To study the formal banking system and their readiness to accept the BF/BC model, we have considered 4 major banks in public sector (Bank of Baroda, Punjab National Bank, Allahabad Bank and Syndicate Bank) and 2 Regional Rural banks (Aryabarta Gramin Bank & Triveni Gramin Bank) as sample for the current study. The selections of the Banks were done based on their presence in the state of UP and also after discussion with the RBI, NABARD and Bank of Baroda (SLBC convener Bank). 2.6 Sampling of the branches of the banks considered In consultation with the controlling offices of the above mentioned banks, we identified minimum 10 branches in the rural and semi urban areas in each districts (already identified in our study) as sample of bank branches for the current study. The selection of the bank branches were made in Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 12
Macro Research Project ‐2008‐09, IIBF, Mumbai
consultation with the controlling office. For the purpose of sampling, only 5 branches were taken out of the 10 identified branches. 2.7 Methodology used 2.7.1 Preparing Questionnaire Questionnaires for different stake holders were prepared. Questionnaire for the Bank’s controlling office and branches, rural & semi-urban customers. Different sets of questionnaires were prepared for the banks operating in the districts with high as well as low financial inclusion. Different set of questionnaires were also prepared for the banks who have already implemented the BC/BF model and those who have not yet implemented the BC/BF model. A separate set of questionnaire were also prepared for the customers who are the beneficiary of both the branch banking and BC/BF model. We have also prepared a set of questionnaire for both the Business Facilitator (BF) and the Business correspondents (BC) operating in the state of Uttar Pradesh. 2.7.2 Pilot testing of questionnaires Pilot testing of the questionnaires were administered with the controlling offices of the identified banks at Bhubaneswar who are not participating in the present study. We discussed with the RBI and NABARD officials at Bhubaneswar along with the questionnaire and reviewed the same. The questionnaires were refined after discussing with all the stake holders. 2.7.3. Preparing a team for field visit We selected 6 of our post graduate students of Rural Management and trained them for a week for the field survey and collection of primary data.
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 13
Macro Research Project ‐2008‐09, IIBF, Mumbai
2.7.4. Field Visits & collection of primary data The field visit started during the first week of January, 2009 and as stated earlier, the 6 students were divided in to three groups to cover the 12 districts as per our study schedule. Each group consisted of two students and were assigned Eastern/Central/western UP. I personally visited each district for pilot study and had focus group discussion with the Lead District Managers and the District authorities and the rest of the survey was done by the groups of students. The Lead District Managers were contacted first through their respective controlling offices and then with the help of the LDM the branches were visited. The LDM also helped the team to discuss with the district officials to note down their views on this particular issue. 2.7.5. Data Collection and Tabulation The primary data collection with the help of questionnaire from the sample districts, branches and the customers were completed during the last week of January, 2009. Tabulation of the primary data so collected was done based on the objectives of the present study. 2.7.6. Focus Group Discussion There is a continuous discussion with the stake holders, people in the policy making and experts in the multidisciplinary areas which has significant impact on the implementation of the BF/BC models aimed at greater financial inclusion. The agenda for the focus group discussion with the Zonal Heads/RBI/NABARD etc along with the dates has been fixed during the last week of February, 2009. 2.7.7. Consultation of Secondary sources of data The secondary data sources are being continuously consulted during the course of the study.
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 14
Macro Research Project ‐2008‐09, IIBF, Mumbai
2.7.8. Tabulation of the data & analysis The primary data were tabulated in Microsoft excel and the services of the specially designed software named SPSS-10 and SPSS-14 were also used for carrying out the analysis part.
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 15
Chapter2 Methodology of the Study 2.1. Sample Design and Sample Size 2.1.1 Sample Design In view of the background and the objectives defined in Chapter-1 and the size of the population under reference, we have used sampling techniques and for this reason random number table was used for greater precision in the results of the study. In this connection the following samples has been studied:a) In order to draw conclusions about the feasibility of Business Correspondent/Business Facilitators as an improvised channel of inclusive growth, sample of both financially excluded and financially included districts in the state of Uttar Pradesh has been considered in the present study. b) Sample was also drawn from branches of different Public/Private Sector Banks and Regional Rural Banks operating in those randomly selected district (Banks under both the categories which have already implemented the Business Correspondent/Business Facilitator model and
which
have
not
yet
implemented
the
Business
Correspondent/Business Facilitator model). c) The sample was also drawn from the end users of branch banking facilities and the people who do not have any relationship with the formal financial system available from the rural and semi urban areas under those selected districts. 2.1.2 The sample design includes multiple steps in order to reduce response bias. This sampling design carried out in different stages involving more Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 8
Macro Research Project ‐2008‐09, IIBF, Mumbai
than one sampling method (multi-stage sampling). We used sampling designs that ensure the generalisability to the greatest extent possible, within a given geographical region. 2.1.3 This study aims at assessing the effectiveness of existing banking facilities vis-à-vis opportunities and challenges of Business Correspondent/ Business Facilitator model for greater financial inclusion in the State of Uttar Pradesh. Keeping in view the population size for the study and the multi stage sampling, the desirable sample size has been determined after setting the parameters of the study under reference. While setting the parameters we kept in mind that more varied the data are, the larger the sample size needs to be to arrive at an expected level of accuracy in generalising the results. Group sampling was also considered to ensure a balanced representation of the different categories of customers. 2.1.4 Sample size Stage –I: - Sampling of Districts Step-1: Subdivision of 71 districts in to 3 broad geographical regions Step-2:- Two (2) Cluster of Districts for each region a) Districts with High level of financial inclusion (>80%) b) Districts with Low level of financial inclusion (<80%)
Sl. No
1 2
Total Sample Size of the Districts: 3*2*2 = the Districts appended Districts of Districts of Eastern UP Central UP Name of Financial Name of Financial the Inclusion the Inclusion District (%) District (%) Mirzapur 88% Rae 89% Bareli Pratapgarh 87% Unnao 84%
3 Chitrakoot 78% Sitapur 79% 4 Banda 76% Jhansi 75% Source: SLBC, Bank of Baroda, Lucknow
12 Districts. The list of Districts of Western UP Name of Financial the Inclusion District (%) Pilibhit 93% Baghpat
91%
Badaun Rampur
78% 77%
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 9
Macro Research Project ‐2008‐09, IIBF, Mumbai
Stage –II: - Sampling of Banks While sampling the banks we have not considered the private sector banks as they are utilising the Direct Selling Agents (DSAs) as their representatives in their area of operation. We have considered the Public Sector Banks and the Regional Rural Banks. As a multiple variables we have also considered the Public Sector Banks those who have strong presence in the state of Uttar Pradesh. While selecting the Regional Rural Banks, we have considered their presence in the Economic zone we have subdivided. Step-1: Out of the Public Sector Banks operating in Uttar Pradesh those who have implemented BC/BF model for financial inclusion, we have considered two (2) Banks for the present study. They are Punjab National Banks and Syndicate Bank. Step-2: Out of the Public Sector Banks operating in Uttar Pradesh those who have not implemented BC/BF model for financial inclusion, we have considered two (2) banks. They are Bank of Baroda (SLBC Convener) and Allahabad Bank Step-3: We have also considered two (2) Regional Rural Banks (RRBs) keeping in view their importance Cluster of Banks in Uttar Pradesh those who have not implemented BC/BF mode for financial inclusion. They are Arayvarta Gramin Bank and Triveni Gramin Bank Total Sample Size: 4 PSBs + 2 RRBs = 6 Banks. The list of the banks appended Stage –III: - Sampling of Bank Branches Step-I: Cluster sampling of five (5) branches of the lead bank (identified Public Sector Banks) of each of the nine (9) districts. Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 10
Macro Research Project ‐2008‐09, IIBF, Mumbai
Step-II: Cluster sampling of five (5) branches of the Regional Rural Banks in each of the three (3) districts where they have the significant presence. Total Sample Size: 5 X 12 = 60 Branches. The list of the bank branches appended Stage –IV: - Sampling of Customers Step-I: Cluster sampling of ten (10) Customers of each five (5) bank branches surveyed in all the twelve (12) districts considered under the present study who have Bank accounts. Step-II: Cluster sampling of ten (10) people who do not have any bank account in the command area of each five (5) branches in all the twelve (12) districts considered under the present study. Total Sample Size: (5 X 5 X 12) + (5 X 5 X 12) = 600 Customers. 2.2 Segmentation of Districts in Uttar Pradesh for the research The state of Uttar Pradesh (UP) has been divided into 3 major economic regions – Eastern, Central and western. Although as per agro-climatic zone, the state has been divided into 9 parts. But for our research purpose we have considered only economic region. Eastern UP consists of 27 districts, Central UP consists of 22 districts and Western UP consists of 21 districts. (Shown in the map – Annexure-1)
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 11
Macro Research Project ‐2008‐09, IIBF, Mumbai
2.3 Data of Financial Inclusion The financial inclusion data of the state was studied from the SLBC reports available from the Office of convener bank (Bank of Baroda) at Lucknow and other public domain. We then listed out the magnitude of the financial inclusion of all the districts of the state. 2.4 Sampling of the Districts to be studied According to the magnitude of the financial inclusion the districts in each economic zone was divided into districts with high financial inclusion and with low financial inclusion. For this purpose we have considered 80% as the Benchmark achievement. After discussions with the NABARD and RBI Officials, it was decided to consider 4 districts in each of the three economic zones of the state. 2.5 Study of the formal Banking system in Uttar Pradesh As such we have studied the entire formal Banking system operating in the state of Uttar Pradesh from various available secondary data. To study the formal banking system and their readiness to accept the BF/BC model, we have considered 4 major banks in public sector (Bank of Baroda, Punjab National Bank, Allahabad Bank and Syndicate Bank) and 2 Regional Rural banks (Aryabarta Gramin Bank & Triveni Gramin Bank) as sample for the current study. The selections of the Banks were done based on their presence in the state of UP and also after discussion with the RBI, NABARD and Bank of Baroda (SLBC convener Bank). 2.6 Sampling of the branches of the banks considered In consultation with the controlling offices of the above mentioned banks, we identified minimum 10 branches in the rural and semi urban areas in each districts (already identified in our study) as sample of bank branches for the current study. The selection of the bank branches were made in Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 12
Macro Research Project ‐2008‐09, IIBF, Mumbai
consultation with the controlling office. For the purpose of sampling, only 5 branches were taken out of the 10 identified branches. 2.7 Methodology used 2.7.1 Preparing Questionnaire Questionnaires for different stake holders were prepared. Questionnaire for the Bank’s controlling office and branches, rural & semi-urban customers. Different sets of questionnaires were prepared for the banks operating in the districts with high as well as low financial inclusion. Different set of questionnaires were also prepared for the banks who have already implemented the BC/BF model and those who have not yet implemented the BC/BF model. A separate set of questionnaire were also prepared for the customers who are the beneficiary of both the branch banking and BC/BF model. We have also prepared a set of questionnaire for both the Business Facilitator (BF) and the Business correspondents (BC) operating in the state of Uttar Pradesh. 2.7.2 Pilot testing of questionnaires Pilot testing of the questionnaires were administered with the controlling offices of the identified banks at Bhubaneswar who are not participating in the present study. We discussed with the RBI and NABARD officials at Bhubaneswar along with the questionnaire and reviewed the same. The questionnaires were refined after discussing with all the stake holders. 2.7.3. Preparing a team for field visit We selected 6 of our post graduate students of Rural Management and trained them for a week for the field survey and collection of primary data.
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 13
Macro Research Project ‐2008‐09, IIBF, Mumbai
2.7.4. Field Visits & collection of primary data The field visit started during the first week of January, 2009 and as stated earlier, the 6 students were divided in to three groups to cover the 12 districts as per our study schedule. Each group consisted of two students and were assigned Eastern/Central/western UP. I personally visited each district for pilot study and had focus group discussion with the Lead District Managers and the District authorities and the rest of the survey was done by the groups of students. The Lead District Managers were contacted first through their respective controlling offices and then with the help of the LDM the branches were visited. The LDM also helped the team to discuss with the district officials to note down their views on this particular issue. 2.7.5. Data Collection and Tabulation The primary data collection with the help of questionnaire from the sample districts, branches and the customers were completed during the last week of January, 2009. Tabulation of the primary data so collected was done based on the objectives of the present study. 2.7.6. Focus Group Discussion There is a continuous discussion with the stake holders, people in the policy making and experts in the multidisciplinary areas which has significant impact on the implementation of the BF/BC models aimed at greater financial inclusion. The agenda for the focus group discussion with the Zonal Heads/RBI/NABARD etc along with the dates has been fixed during the last week of February, 2009. 2.7.7. Consultation of Secondary sources of data The secondary data sources are being continuously consulted during the course of the study.
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 14
Macro Research Project ‐2008‐09, IIBF, Mumbai
2.7.8. Tabulation of the data & analysis The primary data were tabulated in Microsoft excel and the services of the specially designed software named SPSS-10 and SPSS-14 were also used for carrying out the analysis part.
Feasibility of Business Correspondent/Facilitators models for financial inclusion in the state of Uttar Pradesh. Page 15
