Figure 3.3, the conceptual framework, presents a summary of the microfinance components and their relationships with women entrepreneurs as deduced from the literature. It is important to note that Figure 3.3 is not operational but illustrative. The outer box represents the urban and rural setting where microfinance operates, and this indicates the importance of context to this study. The process flow from octagon-like shape at the top left-hand side to the cone-like shape at the bottom right hands side and back to the octagon shape illustrates the flow of resources and outcome expectation of the effective use of the resources by microfinance and women services users. The microfinance circle begins from the supply side, first where funds and regulations are handed to MFIs by donors and government. MFIs are thereafter expected to transfer those financial resources in addition to non-financial services to women clients. These are captured in the burgundy coloured box: the three boxes to the left of the burgundy box consist of the financial component of microfinance, the 2 boxes to the left consist of non-financial services, whilst the boxes at the middle showcase the lending methodology used by microfinance institutions. Microfinance components are accessed by women entrepreneurs, who use them for investment, production and consumption activities detailed the square shape box at the top left-hand side. The microfinance literature assumes that the effective use of microfinance by women could result in positive outcomes such as those listed in the yellow coloured cone shape at the bottom left-hand side. The potential extended outcome of microfinance operations should culminate in financial inclusion of hitherto excluded women, whose income are taxable by the government. The current study intends to investigate the outcomes of women who have access to microfinance in the Nigerian context.
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Figure 3. 3 Conceptual Framework
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3.7 Conclusion
This chapter provided an overview of microfinance impact assessment approaches and the analytical approach that guides this research study. The Sustainable Livelihood Approach was found to be the most appropriate analytical theory to guide the study given that the focus of the study is to assess microfinance impact on women entrepreneurial development and empowerment from the perspective of women clients. The study is also informed by the intended beneficiary impact assessment theory (see Section 3.11), which emphasizes the importance of the perspectives of intervention beneficiaries especially in regard to justifying the effect of interventions. The study will seek to apply a pragmatic approach in selecting methods to enable it to answer the research questions formulated in this chapter. The next chapter proposes the methodology and analytical tools for analyzing the questions posed in this chapter.
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CHAPTER FOUR
RESEARCH METHODOLOGY
4.0 Introduction
This chapter presents an overview of the research philosophy and the different methodological approaches used in the literature to investigate the impact of microfinance on women’s entrepreneurship development and empowerment. This research adopted a pragmatic approach in selecting its research methodology by using the most appropriate methodology to examine the impact of microfinance on women’s entrepreneurship development and empowerment. Firstly. The chapter critically explored the pros and cons of the different approaches used in previous microfinance impact studies. Having conducted a detailed review of the literature, this chapter provides a justification for the use of mixed methods (qualitative and quantitative methods). For instance, Venkatesh et al., (2013) argue that quantitative analysis alone fails to capture the subjective experiences of women microfinance participants. Therefore, there is a case for the use of mixed methods to gain a deeper insight into the outcomes of the relationship between the providers of finance and female clients. The approach used in this study is consistent with similar studies (Hossain & Knight, 2008; Kumar, et al., 2013; Kumar, et al., 2013; Karlan & Zinman, 2010; Okibo & Makanga, 2014). This chapter is organised as follows: (1) Research Philosophy; (2) Methodological Approaches to Microfinance Research; (3) Mixed Method and Justification of its Use in This Study; (4) research design; (5) Gaining Entry into the Field; (6) Sampling Design and Sample Size; (7) Ethical Consideration; (8) Method of Data Analysis and; (9) Conclusions.
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4.1 Research Philosophy
Because social science is the science of people (groups, firms, societies, or economies, and their individual or collective behaviours) (Bhattacherjee, 2012) the philosophy and methods adopted by the researcher are critical to understanding the complexities and the multidimensional nature of their perspectives. It has been acknowledged that the philosophy and method employed in social science research often affect its outcomes (Holden & Patrick, 2004). Therefore, it is important to analyse existing assumptions about research philosophy in a microfinance study. Examining the philosophical standpoints in microfinance research helps the researcher to clarify the overall research design, to identify the appropriate methodologies, methods and even innovate designs outside the researcher’s initial knowledge that are based on previous experience (Easterby-Smith, et al., 2003). In particular, a review of philosophies will provide the researcher with insight about the interrelationship between ontological (what is the nature of reality?), epistemological (what can be known?), and methodological (how can a researcher discover what she or he believes can be known?) levels of enquiry into microfinance (Proctor, 1998).
Two broad strands of epistemologies have received huge attention in the social science research philosophy literature. These are called positivism and interpretivism, thus a research inquiry can be framed using either of these two philosophical strands. Ospina & Dodge (2005) pointed out that a research inquiry can be conducted from outside the object (Positivism) or from inside the object domain (Interpretivism). The outside (positivist view) approach explores reality through observational means that are outside the researcher’s influence. In this context, Bryman (2008) argues that a positivist approach derives knowledge through rigour ous observations of the phenomenon. By observing a phenomenon, facts are gathered that are used to inform our view of reality, whilst the interpretivist approach derives knowledge from the previous experiences of researchers and how they view the object of investigation. According to Smith (2004), the interpretivist approach to understanding reality involves engaging oneself in information about the actors in question and using both empathy
95 | P a g e and imagination to construct credible accounts of their senses of identity. It has been widely acknowledged (Rooyen, et al., 2012; Spielberg, et al., 2013) that microfinance activities may impact on the behaviour of the actors (Microfinance institutions and recipients) due to the relationship fostered by interactions. It is important for researchers to analyse and interpret these relationships to arrive at knowledge about the experiences of the various actors.
Both philosophical paradigms: positivism and interpretivism are commonly applied in microfinance research. Contemporary microfinance research has shown that both the positivist and interpretivist approaches can be used concurrently suggesting that they may not operate in isolation of each other. Notwithstanding, there are still contrasting aspects of these two concepts. Therefore, it is necessary to examine both concepts in greater detail to determine the appropriate philosophy to underpin this microfinance impact investigation.
4.1.1 Positivism
According to Gray (2013), the positivists are of the view that reality exit s independent of the researcher and must be investigated through the rigour ous process of scientific inquiry. Similarly, Porta & Keating (2008) argued that the world exit s as an objective entity, outside the influence of the observer and in principle it is knowable in its entirety. Therefore, the positivist seeks to apply the natural science model of research to investigate social phenomena (Nudzor, 2009). This paradigm views the social world as a single reality independent of the researcher (Blumberg, et al, 2008), that could be understood only through numerical measurement, statistical analysis or the search for cause and effect (Holloway & Wheeler, 2002). The isolation of researchers from participating in the discovery of reality is based on the belief that such involvement will compromise or contaminate the truth. It is assumed that the task of the researcher is to observe, describe and analyse the reality. The foundation of the positivist philosophy is rooted in natural science where facts are deduced through laboratory
96 | P a g e experiments and scientific observations. The positivist argues that researchers may adopt the practice of the natural science in social research by observing the object in its natural setting so that they do not affect the observed object (Porta & Keating, 2008).
However, critics of positivism argue that scientific knowledge has boundaries and limitations, within which, aspects of social life such as religion, tradition and the family system cannot be grasped with the use of one method (Nudzor, 2009). People’s perceptions are important to understand the complexity of the social world. Therefore, humans cannot be separated from the social context in which they exit (Collis & Hussey, 2009).It has been observed that microfinance researchers often require the views of credit institutions and service users in order to make an analysis that is interpreted by the researcher. Therefore, even though positivism could be ideal for natural science research, it may not be entirely applicable to the context of microfinance research where human influences have a significant impact on reality.
4.1.2 Interpretivism
The interpretivist view objective and subjective meanings as inseparable (Porta & Keating, 2008). Interpretivist believes that there are multiple realities due to the varying perceptions of people, thus, in order to examine multiple realities, there is a need for a range of methods other than statistical analysis (Mahmood, et al., 2014). The interpretivist argues that to understand the subjective reality of an issue, an understanding of the practice and perspectives of the people and institutions involved is essential (Bevir & Rhodes, 2004). In contrast to the natural science, the social scienceconsists of subjects (people and institutions) that are entirely different from those of the natural science, hence requiring a different approach that reflects the distinctiveness and complexities of humans (Bryman, 2008). Saunders, et al., (2003) noted that such complexity in the social world cannot be treated as the natural sciences. According to Collis and Hussey, (2009) researchers are not objective and exert some influence on their research. Therefore, it is assumed that by being the investigator, researchers cannot be separated from the social phenomenon under
97 | P a g e investigation. The researchers’ influence is not entirely a negative effect on how reality is understood since the interpretivist believes that the world could be interpreted in two ways: firstly, through the people’s interpretations of their position in the world which are interpreted by the researcher and secondly, through the interpretations of researchers feed-forwarded through literature and media, thus creating a new reality (Porta & Keating, 2008). This is why results in the interpretivism paradigm cannot be generalized as they are in positivism. In the view of the interpretivist, the environment and situation of the world are always evolving, thus results that are generated today may not hold in the future (Blumberg, et al., 2008).
Based on the above discussion, the ontological assumption of this research is that the social world regarding microfinance and women’s entrepreneurship and empowerment is one single fact, but with multiple realities. This is because the social and cultural context allows people to express their beliefs, which may vary. Although the social and cultural factors will not be the focus of this study, however, they do influence the economic decisions of microfinance borrowers in developing countries (Barrientos & Hulme, 2008). Therefore, the researcher could underpin the issues of microfinance and its impact on women’s entrepreneurship and empowerment by not only analysing facts but also the perception of microfinance users. In order to grasp the body of knowledge, it is important to understand microfinance systems and the social factors that contribute to the economic decisions of service users. This implies that to understand the complex realities, there is a need to apply both the philosophical approaches discussed above. In order to do this, it is essential to employ a triangulation approach to examine microfinance impact on women’s entrepreneurship and empowerment.