Sampling Technique

The sampling technique adopted for this study is purposeful sampling (also known as

judgmental sampling). Purposeful sampling is a non-probability sampling procedure in

which the judgment of the researcher is used to select cases that make up the sample to enable him answer his research questions and meet his research objectives (Saunders et al., 2007). According to Marshall (1996), the researcher actively selects the most productive sample to answer the research question. This can involve developing a framework of the variables that might influence an individual's contribution and will be based on the researcher's practical knowledge of the research area, the available literature and evidence from the study itself. Purposeful sampling is often used when working with very small samples such as in case study research and when the researcher wishes to select cases that are particularly informative (Neuman, 2000). Researchers adopting the grounded theory strategy may also use purposive sampling. For such research, findings from data collected from the researcher’s initial sample inform the way he extends his sample into subsequent cases. Such samples cannot, however, be considered to be statistically representative of the entire population. Patton (2002) emphasizes this point by contrasting the need to select information-rich cases in purposeful sampling with the need to be statistically representative in probability sampling.

In connection with this need for sampling to be more representative, this study selected twelve of the largest Nigerian banks for the survey. These include: (1) Zenith Bank (2) First Bank (3) Guaranty Trust Bank (GTB) (4) Access Bank (5) United Bank for Africa (UBA) (6) Ecobank Nigeria Plc (7) Fidelity Bank (8) First City Monument Bank (FCMB) (9) Skye Bank (10) Diamond Bank (11) Stanbic IBTC, and (12) Union Bank of Nigeria. These 12 banks are headquartered in Lagos, the commercial capital of Nigeria. Together, these banks account for more than 77% of the market share of assets and deposits and they were among the only 13 Nigerian Banks listed in the Top 1,000 global banks in 2013 by the Banker Magazine. The reason for excluding 1 of the 13 largest banks is that it is a foreign bank (Standard Chartered Bank), while the others are domestic banks, and including just 1 foreign bank together with 12 domestic banks will misrepresent the overall findings from the survey. Moreover domestic banks dominate the Nigerian banking system. By estimation, these 12 domestic banks provide more than three-quarters of the total loans to SMEs in Nigeria.

Table 4.1 shows that a total of 249 questionnaires were distributed to relationship managers and loan officers spread geographically across 41 branches of the 12 banks in the Lagos Financial Centre, out of which 121 were returned, implying a moderately high response rate of 48.6%. For most academic studies involving top management or organisation’s representatives, a response rate of approximately 35% is reasonable (Baruch, 1999). Saunders et al. (2007: 358) also report that a response rate of 30-50% for questionnaires delivered and collected is in fact normal.

Table 4.1. Questionnaire Distributions and Collection By Bank

S/N Name of Bank Total No

Distributed Total No Returned No of Participating Bank Branches 1 Zenith Bank Plc 34 11 3

2 First Bank of Nigeria Plc 11 9 4

3 Guaranty Trust Bank Plc 15 9 4

4 Access Bank Plc 13 9 4

5 United Bank for Africa Plc 30 9 3

6 Ecobank Nigeria Plc 20 11 3

7 Fidelity Bank Plc 20 10 3

8 First City Monument Bank Plc 23 12 3

9 Skye Bank Plc 15 11 3

10 Diamond Bank Plc 30 11 3

11 Stanbic IBTC Plc 15 10 4

12 Union Bank of Nigeria Plc 23 9 4

Total 249 121 41

Response Rate: 48.60%

Source: Fieldwork on Survey of Loan Officers in Nigeria

Purposeful Sampling Strategies

Patton (2002) identifies several purposeful sampling strategies, ranging from the selection of extreme or deviant (outlier) cases for the purpose of learning from unusual manifestations of the phenomena of interest, to the selection of cases with maximum variation for the purpose of documenting unique or diverse variations that have emerged in adapting to different conditions, and to identify important common patterns that cut across variations (purposeful stratified sampling); and the selection of homogeneous cases for the purpose of reducing

variation, simplifying analysis, and facilitating group interviewing (homogeneity sampling). Other types of sampling designs include criterion sampling, typical case sampling, snowball sampling, intensity sampling, critical case sampling, theory-based sampling, confirming or disconfirming case, purposeful random sampling, opportunistic or emergent sampling and convenience sampling.

This study utilises two of these purposeful sampling strategies – criterion sampling and purposeful stratified sampling. Criterion sampling involves reviewing and studying “all cases that meet some predetermined criterion of importance” (Patton, 2002:238). This approach is frequently employed by research synthesists to construct a comprehensive understanding of all the studies that meet certain predetermined criteria. Most research synthesists employ criterion sampling by stating explicit inclusion/exclusion criteria, which includes specifications for methodological rigour (Suri, 2011). It is crucial to reflect critically and realistically on the criteria being used, especially the criteria for methodological rigour. In line with this idea and in order to achieve the specific objectives of this research, a number of criteria were used to select the type of respondents that would participate in the survey. The criteria used for this study were based on the functions of lending administration – loan appraisal/underwriting, loan disbursement, loan monitoring/ongoing risk management, loan collection and loan review. The participants selected for the survey thus included loan officers, relationship managers and business managers who are either directly or indirectly involved in appraising SME loan applications and/or involved in disbursing, monitoring, collecting or reviewing loans made by banks to SMEs resident in Nigeria.

Another variant of purposeful sampling that was used in this study is stratified purposeful

sampling, which allows the researcher to select his case samples according to sub-groups to

be studied in greater detail. This type of sampling illustrates characteristics of particular sub- groups of interest and facilitates comparisons between the different groups. The study thus took samples across branch types serving SMEs (i.e. retail branches versus commercial branches). Fifty-six respondents were loan officers serving low-end SME customers in retail

branches, while sixty-five loan officers were domiciled in corporate/commercial branches36. The study also took samples based on the level of relationship banking experience that respondents had. Ninety-two of the loan officers (or 76%) had relationship banking experience of over 5 years, while 29 (or 24%) had relationship banking experience of less than 5 years (see table 4.2).

Table 4.2 Demographic Characteristics of Loan Officers

Frequency Percent Valid Percent

Cumulative Percent Less than 5 years R‎/B experience 29 24 24 24 5 years or more R‎/B experience 92 76 76 100

Total 121 100 100

Frequency Percent Valid Percent

Cumulative Percent

Retail Business Branches 56 46.3 46.3 46.3

Commercial Business Branches 65 53.7 53.7 100

Total 121 100 100

Respondents’ Relationship Banking Experience

Valid

Respondents’ Branch Type

Valid

Source: Fieldwork on Survey of Loan Officers in Nigeria

Challenges of Using Purposeful Sampling

Despite its wide use, there are numerous challenges in identifying and applying the appropriate purposeful sampling strategy in any study. For instance, according to Palinkas et al. (2013), the range of variation in a sample from which purposeful sample is to be taken is often not really known at the outset of a study. To set as the goal the sampling of information- rich informants that cover the range of variation assumes one knows that range of variation. Consequently, an iterative approach of sampling and re-sampling to draw an appropriate sample is usually recommended to make certain the theoretical saturation occurs (Miles and Huberman, 1994). However, that saturation may be determined a priori on the basis of an existing theory or conceptual framework, or it may emerge from the data themselves, as in a

36 _{In terms of geographic location, branches in Alimosho, Ojo and Amuwo Odofin Local government areas} (LGAs) of the Lagos Financial Centre were designated as ‘Retail Business Branches’, while branches in Ikeja, Lagos Island and Airport Road, Oshodi/Isolo LGAs were designated as ‘Commercial Business Branches’.

grounded theory approach (Glaser and Strauss, 1967). In addition, purposeful sampling requires access to key informants37 in the field who can help in identifying information-rich cases. Research retrieved through this channel is likely to be biased towards the beliefs prevalent among these informants (Suri, 2011).