Chapter 6 DATA ANALYSIS, INTERPRETATION AND HYPOTHESIS …shodhganga.inflibnet.ac.in/bitstream/10603/37429/15/15_chepter 6.pdf · DATA ANALYSIS, INTERPRETATION AND HYPOTHESIS TESTING

Microfinance Delivery: Challenges & Innovative Strategies of Microfinance Institutions of Ahmedabad & Gandhinagar City

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Chapter 6

DATA ANALYSIS, INTERPRETATION AND HYPOTHESIS

TESTING

6.1 Analysis

In this chapter, the focus was on the analysis of the data and the empirical examination of the

methodological objectives of the study.

The analysis presented in this chapter, comprised of three parts. In the first part, factor analysis was

used to identify the type of challenges faced by Micro Finance Institutions in Ahmedabad and

Gandhinagar district. Second part of the study is to identify the available opportunities for the

microfinance institutions. The data collection from executives, through structured questionnaire,

after due compilation and sorting, is presented both in tabular form and in graphical form. Each

graph shows the analysis on the respondent’s response to the questions asked. In order to study the

challenges affecting Microfinance institutions, a questionnaire was framed using items previously

used in literature. The techno-graphics were measured using a category scale whereas others items

were measured using a five point likert scale wherein respondents indicate their degree of agreement

or disagreement (Strongly Disagree, Disagree, Neither Agree nor Disagree, Agree, Strongly Agree)

for detailed description of the entire questionnaire along with the source for the items. Sample size

was 90, researcher has distributed 90 questionnaires and due to non response error, 75 responses

were received (83.3%) from Ahmedabad and Gandhinagar cities of Gujarat state from MFIs.


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6.2 Summary of Data Analysis & Discussions

Various technographic items have been represented in a tabular form, illustrating relatively

magnitude or frequencies (Table 1).

Table 1 Frequency table based on Questionnaire

Items Frequency Percentage

Operational Area Ahmedabad 56 67 Gandhinagar 19 33

Legal Entity

Trust 3 4 Society 31 41 Section 25 Company 9 12 NBFC 32 43

Importance of Objective Left-client Right-Sus

0 – 100 6 8 20 – 80 24 32 40 – 60 28 37 60 – 40 15 20 80 - 20 2 3

Impact Study Undertaken

Yes 51 68 No 24 32

Distance in Rural Area

More than 10 Kms 20 27 Less than 10 Kms 55 73

Distance in Urban Area

More than 10 Kms 18 24 Less than 10 Kms 57 76

Meeting with Client outside

Institution

No 17 23

Yes 58 77

Frequency of Meeting

Less than once a month 24 32 More than once a month 51 68

Market Survey Conducted

Yes 34 45 No 41 55

MFIs promote all kinds of Business

Strongly Disagree 4 5 Disagree 10 13 Neither Agree nor Disagree 26 35 Agree 12 16 Strongly Agree 23 31

Effective against Poverty

Strongly Disagree 0 0 Disagree 3 4 Neither Agree nor Disagree 0 0


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Agree 26 35 Strongly Agree 46 61

Promote Economic Growth


Aims not only Poverty Purge


Partnership between Comm. Banks & MFIs

Strongly Disagree 4 6 Disagree 13 40

Neither Agree nor Disagree 6 8 Agree 30 17 Strongly Agree 22 29

Source: Own Source


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6.3 Survey Analysis: Fig: 1 Breakup in Ahmedabad and Gandhinagar category on the basis of operational area.

Source: Own Source

From the figure it can be seen that the out of 75 respondents, majority are from Ahmedabad

(67%) and 33% are from Gandhinagar city. The reason is that majority of Microfinance

Institutions are in Ahmedabad district.

Fig: 2 Response regarding the type of legal entity, MFIs are following i.e. Trust, Society, Section 25 Company or Non-banking Financial Institutions

Source: Own Source

When the respondents were asked the question regarding the type of legal entity their MFI

was having, it was found that, 43% of MFIs are Non Banking Financial Institutions (NBFCs)


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followed by society (41%), Section 25 Company 12% and Trust 4%. The number of MFI -

NBFC are relatively much high in especially in Gujarat state.

Fig: 3 Response regarding the extent, MFI’s Governance gives importance to client coverage and/or self sustainability as an objective.

Source: Own Source

From the figure it can be seen that the out of 75 respondents, 43(57%) respondents believe

the fact that both sustainability and outreach are more or less equally important as an

objective.

Majorly, Society and Section 25 Company were having this opinion. NBFCs were

emphasize more on sustainability 30 (40%) as an objective. In case of Legal Entity, Trust,

emphasize is more on client coverage i.e. outreach as compare to sustainability. Thus the

survey found that though the basic ideology of MFIs is to serve the society and reach to the

poors but NBFCs and Section 25 Companies are giving due importance to sustainability as

an objective of the MFI.


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Fig: 4 Response regarding whether MFI undertake impact study to gauge social impact.

Source: Own Source

It can be seen that 68% of respondents have conducted the impact study to know the extent

of improvement in standard of living of people. This helps them to get connected with the

poor people and also helps them to formulate strategies regarding loan management. It also

gives them the way to reach to maximum clients so that the client coverage can be taken care

of along with the objective sustainability.

Fig: 5 Response regarding distance covered by client travel to receive a loan or make a deposit.

Source : Own Source


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When respondents were asked question regarding distance travel to receive a loan or make

deposits, it was found that majority of clients (76%) travel less than 10 kms. This means that

the majority of clients of these MFIs are from nearby areas. The reason is that there are

many Self Help Groups, Joint Liability Groups who are taking care of these clients. These

SHGs and JLGs are linked to these MFIs.

Fig: 6 Meeting with the client outside Institution

Source : Own Source

From the data it can be seen that majority of credit agents (77%) are going out of their

institution to meet their clients. In fact, sales staff is recruited for this purpose. Their

responsibility is to handle the clients of specific region/area. This helps them to get

connected to their clients to keep track of the payment schedule so that NPA fully remains

under control. Meeting clients outside institution also helps credit agents to develop

strategies regarding liability and asset side.


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Fig: 7 Frequency of meeting for allocation of loan

Source : Own Source It can be seen from the chart that for making decision regarding allocation of loans, majority

of MFIs (68%) prefer meeting clients more than once in a month. It indicates that MFIs are

taking care of meeting both the main objectives i.e. sustainability and outreach. Regular

meeting also help MFIs to get connected with their clients.

Fig: 8 Regarding MFI carrying out market survey to improve the quality of services to the clients

Source : Own Source


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It can be seen that despite regular meeting with client to improve the quality of services for

the clients, market survey is not given much importance as a tool to improve overall service.

Market survey can help MFIs to improve overall services. MFIs can come with viable

solutions from the issues raised by clients. Though it was found that the sales staffs are

given training to satisfy the need and requirement of the clients.

Fig: 9 Regarding whether MFIs can promote all kinds of business

Source : Own Source

Data reveals that nearly half of the Microfinance Institutions (47%) agree to the fact that they

can promote all kinds of business i.e all kinds of microfinancing activities like micro saving,

microcredit, micro insurance, remittance and other products like pension, provident fund, etc.

Executives from NBFC and Section 25 Company majorly are of the opinion that MFIs

gradually should start promoting all other microfinancing activities along with microcredit.

On the other hand, 18% of respondents believe that there institution’s role is majorly lending

money and they should focus only on microcredit facilities.


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Fig: 10 Opinion regarding MFI as an effective tool against poverty

Source : Own Source

Response to the question regarding MFI as an effective tool against poverty, reveals that

almost all types of legal entity whether trust, Society, Section 25 Company Act or NBFC

(96%), believes that microfinance is surely an effective tool against poverty. The reason of

stating the same so confidently is because they have conducted the impact assessment study.

Question previously asked shows that the emergence of these institutions has enhanced the

standard of living of people in nearby area.


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Fig: 11 Response regarding partnership between Commercial Banks and MFIs

Source : Own Source

From the chart, it can be depicted that 52% of respondents find partnership between

commercial banks and MFIs as available opportunity, as it helps them to raise funds at

reasonable rate. Data also reveals that 17% of respondents do not take the partnership

between commercial banks and MFIs as an opportunity. The reason could be that after the

scams, the norms of the commercial banks have become stringent regarding loan

disbursement.


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6.4 Factor Analysis

Factor analysis attempts to explain the pattern of correlations within a set of 33 observed

variables of Microfinance Institutions (MFIs). Factor analysis is further used in data

reduction to identify a small number of factors that explain most of the variance observed in

a much larger number of manifest variables. It is further used to generate hypotheses

regarding causal mechanisms or to screen variables for subsequent analysis. (Table 2)

Table 2 KMO and Bartlett's Test

Table 2 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.722

Bartlett's Test of Sphericity

Approx. Chi-Square 1.53E+04 Df 1035 Sig. 0

Source: Own data calculated using SPSS

Here Kaiser-Meyer-Olkin Measure of Sampling Adequacy is 0.722 which is above 0.7 so

believed to efficient for scales.

Further in order to evolve the underlying dimensions of challenges faced, principle component

factor along with Varimax rotation was conducted on 33 acceptance items using minimum

Eigen value of 1 as a criterion for factor extracted (Table 3).

Table 3 Communalities

Initial tra_co 1 Roa 1 op_re 1 co_de 1 Par 1 res_lo 1 l_proof 1 fin_res 1


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per_ad 1 fin_re 1 mg_pro 1 ran_pro 1 inad_net 1 Mis 1 Govern 1 Skill 1 reten_rate 1 Mindset 1 hum_qua 1 Infra 1 Albb 1 Flex 1 Bosm 1 Reach 1 new_ar 1 Bopfsw 1 cons_front 1 act_borr 1 gov_reg 1 con_inv 1 fin_lit 1 Comp 1 inst_role 1 Extraction Method: Principal Component Analysis.


Initial communalities are estimates of the variance in 33 observed variables accounted for by all

components or factors. Extraction communalities are estimates of the variance in each variable

accounted for by the factors (or components) in the factor solution. In the above table it can be seen

that all the 33 sub variables are having extraction more than 0.5 and thus it can be said that all

observed variables are fit well with the factor solution (Table 2).


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Total 9 major factors are extracted having 33 items and these 9 factors explain 87.65 % variance

in scale (Table 4). The factors generated were as follows:

Table 4 Total Variance Explained

Compo-nent

Initial Eigenvalues Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total

% of Varianc

e Cumulativ

e % Total

% of Varianc

e

Cumulative

% Total

% of Varianc

e 1 6.22 18.85 18.85 6.22 18.85 18.85 4.36 13.22 2 4.95 15.02 33.87 4.96 15.02 33.87 4.22 12.80 3 3.60 12.90 46.77 3.60 12.90 46.77 3.71 11.24 4 3.13 10.48 57.25 3.13 10.48 57.25 2.88 9.74 5 2.87 8.68 65.93 2.87 8.68 65.93 2.49 8.56 6 2.16 6.55 72.48 2.16 6.55 72.48 2.47 8.48 7 1.98 6.01 78.49 1.98 6.01 78.49 2.38 8.21 8 1.53 4.62 83.11 1.53 4.62 83.11 2.34 8.39 9 1.39 4.54 87.65 1.39 4.54 87.65 2.21 7.01 10 1.09 3.32 87.65 11 0.88 2.66 90.31 12 0.72 2.18 92.49 13 0.58 1.77 94.26 14 0.47 1.41 95.67 15 0.35 1.06 96.73 16 0.27 0.82 97.55 17 0.23 0.69 98.24 18 0.20 0.62 98.86 19 0.12 0.35 99.21 20 0.09 0.28 99.49 21 0.07 0.22 99.71 22 0.05 0.16 99.87 23 0.03 0.09 99.95 24 0.02 0.05 100.00 25 0.00 0.00 100.00 26 0.00 0.00 100.00 27 0.00 0.00 100.00 28 0.00 0.00 100.00


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29 0.00 0.00 100.00 30 0.00 0.00 100.00 31 0.00 0.00 100.00 32 0.00 0.00 100.00 33 0.00 0.00 100.00 Extraction Method: Principal Component Analysis.

Source: Own data calculated using SPSS Fig 12: Scree Plot of Variables


The Scree plot in Figure 12, is breaking at 33 sub- factor, which indicate that all these sub

factors are significantly influencing Nine factors respectively.


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Table 5 : Summary Sheet of Factors generated

Components Name of the factor

Eigen Value

% of Variance

Cronbach Alpha

Financial Issues

High Transaction cost

6.22 18.522 0.912

Inadequacy of financial resources as the primary constraint (cheap fund) Rescheduling loans High personnel & admin expenses relative to loan portfolio Use of asset to generate return Frequency of financial reporting to Management Quality of portfolio

Operational Issues

Quality human resources

4.957 15.02 0.874

Provision of a range of products and services Lack of basic infrastructure Availability of inadequate network Management and processing of data

HR issues

No. of borrowers per field staff worker

3.597 10.899 0.751

Reaching the very poor No. of active borrowers Average loan balance per borrower Flexibility w.r.t timing of its operation

Social issues

Collection & delivery of money to remote areas

3.129 4.128 0.713

low profitability of dealing with poor clients Difficult to cover cost with operating revenue

External issues

Govt. Regulatory actions for MF industry

2.866 8.684 0.675

Loans used in Consumption not invested Competition Banks and lending institution’s role in MF industry

Expansion

Going into new areas

2.16 6.547 0.699 Constraints in Reaching Frontier Areas Retention rate

Financial Literacy

Client’ financial literacy 1.984 6.012 0.823 Borrower per staff member


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Management Information System

Governance problems

1.525 4.622 0.784 Management Information System

Institutional Goals

Development mindset of staff

1.394 4.21 0.664 Education and skill set and of staff member


Table 5 indicates the factor loading is more than 0.5 for all variables which indicate that all of them

are significant in influencing their respective factors. The Eigen values of Nine factors found are

more than 1. Cronbach Alpha for nine factors is 0.7, which signifies that the data is reliable.

In case of the first factor, Financial Issues, factor loading is the highest for the sub factor, High

transaction cost (0.868) which indicates that it is a major financial issue among all given sub factors,

followed by Inadequacy of financial resources as the primary constraint,(cheap fund) 0.846. As all

sub-factor loads are more than 0.5, except rescheduling loans (-0.811); they are significant in

influencing Financial Issues.

In case of the second factor, operational Issues, factor loading is the highest for the sub factor,

management and processing of data which indicates that it is a major operational issue among all

given sub factors. As all sub-factor loads are more than 0.5, they are significant in influencing

operational Issues. Through the survey it was found that MFIs are having operational issues like

management and processing of data, provision of a range of products and services, lack of basic

infrastructure and availability of inadequate network.

In case of the third factor, Human Resource issues, factor loading is the highest for the sub factor,

No. of borrowers per field staff worker (0.888). This indicate that the MFIs in Ahmedabad and

Gandhinagar area the number of employees especially field staff worker are less. Moreover

sufficient training on time to time basis is required to be given to them so that the productivity

increases.


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It can be seen that in the fourth factor, social issues, factor loading is highest for Collection &

delivery of money to remote areas (0.614). As all sub-factor loads are more than 0.5, they are

significant in influencing sustainability.

In case of the fifth factor, external issues, factor loading is the highest for the sub factor,

Government regulatory actions for MF industry (0.656). The reason for the same is the scams

coming out microfinance area. Due to which fortunately RBI has become active and has passed

Microfinance Act. In case of sub-factor, Banks and lending institution’s role in MF industry, the

factor loading is negative (-0.819) which indicate that the banks and lending institutions are not seen

as challenge, but as a supporter to smooth functioning of microfinance activities.

It can be seen that in the sixth factor, factor loading is highest for the sub factor retention rate

(0.915). This indicates that the attrition rate among employees in microfinance business is high.

Thus the salary package, incentives, regular training, work environment etc. to be improved to

reduce the attrition. It can be seen that in the seventh factor, financial literacy, factor loading is

highest for Client’ financial literacy (0.857). As all sub-factor loads are more than 0.5, they are

significant in influencing financial literacy. This means the staff members especially field officers

should be having proper training as to how to make the illiterate and uneducated clients financially

literate.

In case of the eighth factor, management information system, factor loading is the highest for the

sub factor, MIS system (0.956) followed by governance problem. The reason for the same is the

majority of MFIs are relatively small in size, due to which the use of sophisticated MIS tools are not

in much use. Due to less number of computers the use of software package is limited. Another

reason is that sophisticated tools costs high which these small MFIs could not able to afford.

It can be seen that in the ninth factor, institutional goals, factor loading is highest for development of

mind set of staff (0.796) followed by education and skill-set of staff member (0.643) indicates that

the MFIs are facing problems regarding availability of trained staff with mindset.


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6.5 Hypothesis Testing 6.5.1 Hypothesis formulated based on Legal Entities as factor wise.

H11: Difference in legal entities has influence upon financial issues as a factor faced by MFIs.

H12: Difference in legal entities has influence upon operational Issues as a factor faced by MFIs.

H13: Difference in legal entities has influence upon social impact as a factor faced by MFIs.

H14: Difference in legal entities has influence upon sustainability as a factor faced by MFIs.

H15:. Difference in legal entities has influence upon external issues as a factor faced by MFIs.

H16: Difference in legal entities has influence upon expansion as a factor faced by MFIs.

H17: Difference in legal entities has influence upon financial literacy as a factor faced by MFIs.

H18: Difference in legal entities has influence upon management information system as a factor

faced by MFIs.

H19: Difference in legal entities has influence upon institutional goal as a factor faced by MFIs.

Table 6 Hypothesis tested based on Legal Entities

Items Legal Entity N Mean Sig.

Level df. F

Value Null

Hypothesis

Financial Issues

Trust 3 3.18

0.005 74 4.62 NA

Society 31 3.091 Section 25 Company 9 3.59 NBFC 32 3.979

Operational

Issues

Trust 3 1.933

0.003 74 5.05 NA


H R issues

Trust 3 2.533

0.689 74 0.491 A


Social Issues

Trust 3 3.777

0.002 74 5.46 NA


External issues

Trust 3 2.903 0.001 74 5.625 NA Society 31 3.066


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Section 25 Company 9 3.987 NBFC 32 3.827

Expansion

Trust

3

3.073

0.113

74

2.059

A Society 31 2.938 Section 25 Company 9 2.993 NBFC 32 2.678

Financial literacy

Trust 3 2.967

0.185 74 1.65 A Society 31 2.997 Section 25 Company 9 3.000 NBFC 32 2.759

Management

Information System

Trust 3 3.033

0.013 74 4.93 NA Society 31 2.971 Section 25 Company 9 2.192

NBFC 32 2.014

Institutional Goals

Trust 3 3.167

0.931 74 0.148 A Society 31 2.903 Section 25 Company 9 2.889 NBFC 32 2.828


It can be inferred that the difference in legal entities has influence upon Financial issues, Operational

Issues, social issues, External issues and Management Information System, as a factor faced by

MFIs, as null hypothesis is fail to accept because p value is less than significance level of 0.05

(Table 6). Further it can be seen that MFIs having legal entity NBFCs and Section 25 Company are

facing more perceived challenge in factor Financial Return; NBFCs are facing more perceived

challenge in factor Operational Issues. MFIs having legal entity Trust and Society are facing more

perceived challenge in factor sustainability. MFIs having legal entity NBFC and Section 25

Company are facing more perceived challenge in case of external factors as factor. The reason could

be the uncertainty prevailing among MFIs due the scams in Andhra Pradesh. Loan procedures have

become even tough. Banks are under scrutiny regarding loan disbursement to MFIs; moreover due

to the entry of more MFIs in market, competition is becoming tough. MFIs having legal entity Trust

and Society are facing more perceived challenge in factor Management Information System.

All other factors i.e. social impact, expansion, financial literacy and institutional goals show

insignificant relationship, as there p value is more than 0.05.


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6.5.2 Hypothesis developed based on objectives of microfinance institutions as factor wise. H21: Difference in objectives of Microfinance Institutions has influence upon financial issues as a

factor faced by MFIs.

H22: Difference in objectives of Microfinance Institutions has influence upon operational Issues as a


H23: Difference in objectives of Microfinance Institutions has influence upon social impact as a


H24: Difference in objectives of Microfinance Institutions has influence upon sustainability as a


H25: Difference in objectives of Microfinance Institutions has influence upon external issues as a


H26: Difference in objectives of Microfinance Institutions has influence upon expansion as a factor

faced by MFIs.

H27: Difference in objectives of Microfinance Institutions has influence upon financial literacy as a


H28: Difference in objectives of Microfinance Institutions has influence upon management

information system as a factor faced by MFIs.

H29: Difference in objectives of Microfinance Institutions has influence upon institutional goal as a


Table 7 Hypothesis tested based Objectives

Items Importance of Objective N Mean

Sig. Level df.

F Value

Null Hypothesis

Financial Issues

0-100% 6 2.361

0.00 74 7.49 NA

20%-80% 24 3.206 40%-60% 28 3.396 60%-40% 15 3.335 80%-20% 2 3

Operational Issues

0-100% 6 2.543

0.001 74 5.533 NA

20%-80% 24 3.432 40%-60% 28 2.68 60%-40% 15 3.271 80%-20% 2 2.8


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H R issues

0-100% 6 2.4

0.031 74 2.82 NA

20%-80% 24 3.084 40%-60% 28 2.847 60%-40% 15 3.282 80%-20%- 2 2.4

Social issues

0-100% 6 2.426

0.004 74 4.22 NA

20%-80% 24 1.982 40%-60% 28 2.932 60%-40% 15 2.804 80%-20% 2 3

External issues

0-100%

6

2.431

0.004

74

4.255

NA

20%-80% 24 2.926 40%-60% 28 2.964 60%-40% 15 3.174 80%-20% 2 2.8

Expansion

0-100% 6 2.417

0.014 74 3.369 NA

20%-80% 24 2.665 40%-60% 28 2.914 60%-40% 15 3.088 80%-20% 2 2.73

Financial literacy

0-100% 6 2.457

0.023 74 3.412 NA

20%-80% 24 2.79 40%-60% 28 2.937 60%-40% 15 3.129 80%-20% 2 2.8

Management Information

System

0-100% 6 2.42

0.013 74 3.486 NA

20%-80% 24 2.73 40%-60% 28 2.928 60%-40% 15 3.107 80%-20% 2 2.75

Institutional Goals

0-100% 6 2.714

0.025 74 3.738 NA

20%-80% 24 2.658 40%-60% 28 2.983 60%-40% 15 3.059 80%-20% 2 2.5


It can be inferred that the difference in objectives of Microfinance Institutions has influence upon all

factors i.e. Financial Issues, Operational Issues, Human Resource issues, Social issues, External

Factors, Expansion, Financial Literacy, Management Information System and Institutional Goals as


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a factor faced by MFIs, since p value is less than significance level of 0.05, null hypothesis is fail to

be accepted. In other words alternative hypothesis is accepted that, the is difference in objectives of

Microfinance Institutions has influence upon all nine factors faced by MFIs. Based on literature

review, the percentage distribution between outreach and sustainability can be, 0%-100% indicate

focus is only on sustainability, 20%-80% is 20% outreach and 80 % sustainability, 40%-60% is 20%

outreach and 80 % sustainability, 60% - 40% is 60% outreach and 40 % sustainability, 80% - 20% is

80% outreach and 20 % sustainability.

For the factor, Financial Issues, it is observed that the highest mean value (3.396) is for 40%-60%

objective type which indicated that the MFIs should focus more on the 40%-60% combination of

objective, followed by 60%-40% combination of objective. All the factors show significant

relationship, except factor, operational issues and HR issues, as there p value is less than 0.05, the

significance level of 5 per cent. Further it can be stated that MFIs are giving more importance to self

–sufficiency as an objective in factors Financial issues, Operational Issues, H R issues, External

factors, Expansion, Financial literacy and Management Information System, where as in factor

Sustainability, more importance is given to client coverage as an objective (80 percent).

6.5.3 Hypothesis based on available opportunities in providing microfinance H31: There is significant difference in the perceived available opportunities for all types of

businesses among trust as legal entity.

H32: There is significant difference in the perceived available opportunities for all types of

businesses among society as legal entity.


businesses among section 25 company as legal entity.


businesses among NBFC as legal entity.


businesses among legal entity as a whole.


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H36: There is significant difference in the perception of MFIs’ regarding their effectiveness against

poverty among trust as legal entity.


poverty among society as legal entity.


poverty among section 25 company as legal entity.


poverty among NBFC as legal entity.


poverty among legal entity as a whole.

H311: There is significant difference in the perception of MFIs for promoting economic growth

among trust as legal entity.


among society as legal entity.


among section 25 company as legal entity.


among NBFC as legal entity.


among legal entity as a whole.

H316: There is significant difference in perception about MFI’s being effective in poverty purge

among trust as legal entity.


among society as legal entity.


among section 25 company as legal entity.


among NBFC as legal entity.


among legal entity as whole.


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H321: There is significant difference in the perception of MFIs’ regarding working in partnership

with commercial banks among trust as legal entity.


with commercial banks among society as legal entity.


with commercial banks among section 25 company as legal entity.


with commercial banks among NBFC as legal entity.


with commercial banks among legal entity as whole.

Table 8 Descriptive Statistics

N Mean Std.

Deviation Std. Error

95% Confidence Interval for Mean

Minimum Lower

Bound Upper Bound

Promote all kinds of business

1 3 2.00 1.04 0.13 2.00 2.00 2.0 2 31 2.16 1.27 0.23 2.70 3.63 1.0 3 9 3.67 0.71 0.24 3.12 4.21 2.0 4 32 3.94 0.84 0.15 3.63 4.24 2.0

Total 75 3.51 1.11 0.13 3.25 3.76 1.0

Effective against poverty

1 3 5.00 2.30 0.00 5.00 5.00 5.0 2 31 3.39 1.26 0.23 2.93 3.85 1.0 3 9 4.00 0.50 0.17 3.62 4.38 3.0 4 32 4.03 0.78 0.14 3.75 4.31 2.0

Total 75 3.80 1.04 0.12 3.56 4.04 1.0

Promote economic growth

1 3 4.00 0.00 1.04 4.00 4.00 4.0 2 31 3.45 1.31 0.24 2.97 3.93 1.0 3 9 4.67 0.71 0.24 4.12 5.21 3.0 4 32 4.47 0.92 0.16 4.14 4.80 2.0

Total 75 4.05 1.17 0.14 3.78 4.32 1.0

Aim not only poverty

purge

1 3 2.00 0.00 0.00 2.00 2.00 2.0 2 31 3.00 1.37 0.25 2.76 3.76 1.0 3 9 4.44 1.13 0.38 3.58 5.31 2.0 4 32 4.96 1.01 0.18 4.04 4.77 2.0


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Total 75 3.84 1.34 0.15 3.53 4.15 1.0

Partnership between Banks &

MFIs

1 3 5.00 0.00 0.00 5.00 5.00 5.0 2 31 3.45 1.31 0.24 2.97 3.93 1.0 3 9 4.00 0.50 0.17 3.62 4.38 3.0 4 32 4.03 0.78 0.14 3.75 4.31 2.0

Total 75 3.83 1.06 0.12 3.58 4.07 1.0 Source: Own data calculated using SPSS

It can be observed that mean value is more than 3 on a scale of 1 to 5, with 1 indicating strong

disagreement and 5 indicating strong agreement with the available opportunities. From the table it

can be seen that, for three types of Legal Entity i.e. Society (3.16), Section 25 Company (3.67) and

NBFC (3.94) agreeing that MFIs promote all kinds of business as mean value is higher than 3,

whereas Trust (2.00) disagrees with the same which indicates that the people involved in running the

trust do not have similar perception regarding entry into different types of business. Statement

regarding microfinance institutions are effective tool against poverty response, table shows that all

four types of legal entity strongly believes that microfinance institutions promote economic growth

i.e. Trust (4.00) Society (3.45), Section 25 Company (4.67) and NBFC (4.47). Response is mixed

for the statement, Microfinance Institution’s aim is not only poverty purge as Section 25 Company

(4.44) and NBFC (4.41) strongly believes the same. The reason is that they have to balance between

sustainability and outreach. Whereas trust (2.00) emphasizes more on outreach and the response of

Society (3.00) is neutral in this regard. Finally all four legal entities strongly believe that partnership

between commercial banks & MFIs definitely helps in meeting the institution’s objectives.

Table 9: Test of Homogeneity of Variances

Levene Statistic df1 df2

Promote all kinds of business

4.947 3 71 Effective against poverty

7.675 3 71


149


5.663 3 71 Aim not only poverty purge

3.838 3 71 Partnership between Banks & MFIs

9.19 3 71 Source: Own data calculated using SPSS

From the table no 9, it can be seen that the p value (0.062, 0.123, 0.062, 0.213, and 0.112) for all

objective is greater than α level (0.05) for Test of Homogeneity of Variances, and thereby it fail to

reject H0 which increases the confidence that the variances are equal and the homogeneity of

variance assumption has been met.

From the table no. 10, it can be seen that since p value is less than significance level of 0.05, we fail

to accept Null Hypothesis. Hence, Alternative hypothesis is accepted i.e. there is significant

difference in the perceived available opportunities among different legal entities. Hence, MFIs’

promote all kinds of Business, Partnership between commercial banks & MFIs, MFIs promote

economic growth, MF’s aim is not only poverty purge and MFIs’ most effective against poverty

among different legal entities like Trust, Society, Section 25 Companies and NBFCs.

Table 10: ANOVA Summary Sheet

Sum of Squares df

Mean Square F Sig.

Promote all kinds of

business

Between Groups

(Combined) 16.68 3 5.56 5.33 0 Linear Term

Unweighted

11.66 1 11.66 11.17 0 Weighted

15.06 1 15.06 14.44 0 Deviation 1.62 2 0.81 0.78 0.46

Within Groups 74.07

71 1.04

Total 90.75

74


150

Effective against poverty

Between Groups

(Combined) 11.68 3 3.89 4.05 0.01 Linear Term

Unweighted

1.54 1 1.54 1.6 0.21 Weighted

2.26 1 2.26 2.35 0.13 Deviation 9.41 2 4.71 4.89 0.01

Within Groups 68.32

71 0.96

Total 80

74


Between Groups


Unweighted

2.01 1 2.01 1.75 0.19 Weighted

13.94 1 13.94 12.13 0.11 Deviation 6.2 2 3.1 2.69 0.07

Within Groups 81.65

71 1.15

Total 101.79

74

Aim not only

poverty purge

Between Groups

(Combined) 34.2 3 11.4 8.27 0 Linear Term

Unweighted

20.63 1 20.63 14.96 0 Weighted

29.84 1 29.84 21.64 0 Deviation 4.37 2 2.18 1.58 0.21

Within Groups 97.88

71 1.38

Total 132.08

74

Partnership between Banks &

MFIs

Between Groups


Unweighted

1.62 1 1.62 1.59 0.21 Weighted

1.66 1 1.66 1.62 0.21 Deviation 8.44 2 4.22 4.13 0.02

Within Groups 72.65

71 1.02

Total 82.75

74



151

From the table no. 10, it can be seen that since p value is less than significance level of 0.05, we fail

to accept Null Hypothesis. Hence, Alternative hypothesis is accepted i.e. there is significant

difference in the perceived available opportunities among different legal entities.

Taking all legal entities as a whole, the observed significance level is less than 0.05 indicating

significant difference in the perceived available opportunities for all types of businesses. For

unweighted means, the observed significance level is level is less than 0.05 indicating that even if

different types of legal entities have equal presence across the economy, there is significant

difference in the perceived available opportunities for all types of businesses. For weighted means,

the observed significance level is level is less than 0.05 indicating that if different types of legal

entities are proportionately present across the economy, there is significant difference in the

perceived available opportunities for all types of businesses. This indicates that trust and society are

majorly focusing more on microcredit activity whereas NBFC and Section 25 Company focusing

more on providing more services than merely providing microcredit. They are also providing

personal loan, group loan, vehicle loan, farm equipment loan, consumer durable loans, insurance

product etc.

Statement regarding microfinance institutions are effective tool against poverty response, table

shows that all four types of legal entity strongly believes that microfinance institutions promote

economic growth i.e. Trust (4.00) Society (3.45), Section 25 Company (4.67) and NBFC (4.47).

Taking all legal entities as a whole the observed significance level is less than 0.05 indicating

significant difference in the perception of MFIs’ regarding their effectiveness against poverty. For

unweighted means, the observed significance level is level is greater than 0.05 indicating that if

different types of legal entities have equal presence across the economy, there is not much

significant difference in the perception of MFIs’ regarding their effectiveness against poverty. For

weighted means, the observed significance level is level is greater than 0.05 indicating that if

different types of legal entities are proportionately present across the economy, there is not much

significant difference in the perception of MFIs’ regarding their effectiveness against poverty. This

implies that all the type legal entities perceive that microfinance is effective tool in reducing poverty.


152


significant difference in the perception of MFIs for promoting economic growth. For unweighted

means, the observed significance level is level is greater than 0.05 indicating that if different types

of legal entities have equal presence across the economy, there is not much significant difference in

the perception of MFIs’ for promoting economic growth. For weighted means, the observed

significance level is level is less than 0.05 indicating that if different types of legal entities are

proportionately present across the economy, there is significant difference in the perception of MFIs’

for promoting economic growth. This implies that all the type legal entities are having the same

opinion that microfinance institutions definitely help in promoting economic growth of country.


significant difference in the perception of MFIs for not only focusing on outreach but also focusing

on sustainability (MF’s aim is not only poverty purge). For unweighted means, the observed

significance level is level is less than 0.05 indicating that even if different types of legal entities have

equal presence across the economy, there is significant difference in the perception of MFIs for not

only focusing on outreach but also focusing on sustainability. The reason for the same is because

NBFCs and Section 25 Company are focusing more on sustainability whereas society focuses on

both, sustainability and outreach. For weighted means, the observed significance level is level is less

than 0.05 indicating that if different types of legal entities are proportionately present across the

economy, there is significant difference in the perception of MFIs for not only focusing on outreach

but also focusing on sustainability.


significant difference in the perception of MFIs’ regarding working in partnership with commercial

banks for smooth functioning of MFIs. For unweighted means, the observed significance level is

level is greater than 0.05 indicating that if different types of legal entities have equal presence

across the economy, there is not much significant difference in the perception of MFIs’ regarding

working in partnership with commercial banks for smooth functioning of MFIs. For weighted

means, the observed significance level is level is greater than 0.05 indicating that if different types

of legal entities are proportionately present across the economy, there is not much significant


153

difference in the perception of MFIs’ regarding working in partnership with commercial banks for

smooth functioning of MFIs. This implies that all the type legal entities are strongly having the

same opinion that partnership with banks would support in better functioning of their microfinance

activity.

Documents

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