Like any other research, during field research the researcher faced various challenges and problems, starting with identification of samples to data collection process in the field, including population identification, sampling process and actual data collection. In the population identification process, the researcher was unable to obtain a complete, valid and recent comprehensive list of BPRS and BMTs in East Java and their borrowers; thus, the non-probability sampling method is applied.
In the sampling process, the researcher faced challenges in terms of cost, time and cooperation from the respondents. This is a self-funding field study unsupported by any institutions. This limited the number of respondents that could be captured, as reaching a large number of respondents throughout East Java was impractical.
In terms of time allocated for the data collection process, the researcher only had around three months to collect data from questionnaires and the interviews in East Java, Indonesia, which is the researcher’s home country. This should be considered a limitation, as within this limited period it was not possible to expand the number of respondents. It should be noted that the respondents to the questionnaires are the borrowers of BMTs and BPRS, and the interviewees are the Directors/Managers. Waiting for their approval to conduct interviews and research on their premises, and to gain access to the borrowers through them, proved to be time-consuming.
Cooperation with the target institutions was the most challenging problem faced. Some institutions delayed their response or refused to provide supporting data or provide published reports, although the data are available and should be accessible by the public. Here, issues of transparency of Islamic financial institutions arose. Also, most institutions did not provide enough lists of borrowers’ data for the questionnaire survey due to confidentiality issues.
Furthermore, in the actual data collection process, some respondents tend to be reluctant to answer the questionnaires, particularly on the questions relating to the value of sales, income and expenditures. Thus, before the respondents answer the questionnaires, they are provided with sufficient information about the purpose of the research and assuring confidentiality of the information, which is done through personal approach,
Despite all the burdens and challenges, the collected data which were analysed in this research should be considered relatively satisfactory in terms of supporting the analysis; for this, gratitude should be extended to the institutions for their support, particularly BMTs which seemed to be more open and offered kinship.
Chapter 6 EXPLORING PROFILE, FINANCING PERFORMANCE AND SOCIO-
ECONOMIC IMPACTS OF ISLAMIC MICROFINANCE ON INDONESIAN MICRO AND SMALL ENTERPRISES
6.1. INTRODUCTION
This chapter is the first of two empirical chapters presenting the initial descriptive results and inferential statistical analysis of the primary data collected through the questionnaire survey as detailed in the Research Methodology chapter. The descriptive analysis in this chapter initially focuses on presenting findings related to demographic variables, while the second part presents the perceptions of participants on the economic and social impact of financing from BMT and BPRS in some cities in East Java, Indonesia.
Then, as a continuation of the descriptive analysis, the next section presents further empirical analysis through inferential statistical methods with the data assembled through questionnaires distributed to microenterprises to gain a better understanding of issues, problems, financing performance and socio-economic impacts. Before conducting empirical analysis, the distribution nature of the data was checked through normality check procedures, and the findings showed that the data distribution is not normal. In addition, since the data collection by questionnaire method was purposive rather than random sampling as necessitated by the nature of the questionnaires and the requirement for suitable respondents, it was expected that the data should not be normal. In substantiating the ‘non-normal distribution of the data’, most of the data types employed in the questionnaires were also in discrete categories rather than in interval level scales. Based on these reasons, the data were considered non-normally distributed, and therefore, the non-parametric statistical tests applied in this research included the Chi-Square Test, MWU test, KW test, Wilcoxon Signed Rank Test, and Factor Analysis. These empirical tests are mainly conducted in order to analyse the significant relationships among variables and to compare the significant differences, if any, between several subgroups, for example areas of business, business fields, types of micro financing, education etc..
The analysis in this chapter is based on 348 usable questionnaires and divided into the following subsections:
(i) Microenterprises profile in terms of demographics, financing performance, economic impact and social impact. The descriptive analysis is based on statistical methods such as frequency, percentage and mean/median.
(ii) major issues and problems of microenterprises in East Java, Indonesia, consisting of business problems, the level of understanding of Islamic terms used in financing products, the intentions of borrowing, the collateral provided to borrow money, and arrears issues;
(iii) microenterprises’ perceptions of the financing and non-financing services provided by BMT and BPRS, and the dominant factors in reasons for choosing the BMT or BPRS;
(iv) the role of BMT and BPRS in economic development, including analysis of the economic impacts (impacts on assets, sales, net incomes, business expenditures, household expenditures and employment) and analysis of the socio-economic impacts including social, religious and other impacts.