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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%)
Total Sample Size of the Districts: 3*2*2 = 12 Districts. The list of
the Districts appended
Sl. Districts of Districts of Districts of
No Eastern UP Central UP Western UP
Name of Financial Name of Financial Name of Financial
the Inclusion the Inclusion the Inclusion
District (%) District (%) District (%)
1 Mirzapur 88% Rae 89% Pilibhit 93%
Bareli
2 Pratapgarh 87% Unnao 84% Baghpat 91%
3 Chitrakoot 78% Sitapur 79% Badaun 78%
4 Banda 76% Jhansi 75% Rampur 77%
Source: SLBC, Bank of Baroda, Lucknow

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 
 

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