CHAPTER 3 METHODOLOGY

Research type The research type in quantitative in nature. The core aim of the quantitative research is to find out the relationship between the dependent variable and the independent variable. The study will be based on measuring the sample on the subject area which is microfinance institutions of Pakistan. Then the relationship between the variable is to be build using statistical tools such as correlation and time serious analysis. Study setting of the research will be neutral. Then the aim of the research will be to find out undesirable situation and then finding out the appropriate readymade solution in theory.

Data type and research period The data used for the research will be secondary data. That will be collected from various sources mainly literature that is available over the net. The sample size mainly consists of seven active micro banks operating in Pakistan. Then the data on the variables are found that affect the working and efficiency of these banks. The overall performance of the microfinance industry will be analyzed by studying the trends over the years. As the history of Pakistan shows that the experiment with microfinance during the time period of 1980 resulted in the appearance of different micro institutions. But the micro sector in

Pakistan formally started giving loans after 2000. So the time frame of this research is for five years that is 2004-2008. Sources of data In order to collect the data different source were consulted. Reports from the state bank of Pakistan, annual statements of the micro institution, data from Gallup Pakistan and Pakistan micro finance network was taken. Population, Working population and planned sample The population is the total amount of micro institutions working in Pakistan. Whereas the sample of seven of micro institution is taken which includes Kashf Foundation, Khushali bank, First micro finance bank limited Pakistan, Network microfinance Bank, Pak Oman Micro finance, Bank, Rozgar Micro finance Bank and tamer Micro finance Bank. Research hypothesis 1. Ho: There is significance relationship between active borrowers and number of outstanding loans. H1: There is no significant relationship between active borrowers and number of outstanding loans 2. Ho: with the increase in number of loans per loan officer the number of outstanding loans increases. H1: with the increase in number of loans per loan officer the number of outstanding loans does not increases.

3. Ho: There is direct relationship between average gross loan and number of outstanding loans H1: There is indirect relationship between average gross loan and number of outstanding loans 4. Ho: With the increase in the portfolio risk the number of outstanding loans also increases H1: With the increase in the portfolio risk the number of outstanding loans does not increases Techniques After gathering the data the regression test will be conducted. The data on the sample size will be analyzed after finding that to what extend the variable is significant with the independent variable. T test will also be conducted for the purpose of forecast Data analysis The statistical package Minitab and stats graphics will be used to analyze the data. Regression will be conducted to check the relationship between the variable over the years. Graphs and tables would be used to represent the results. Data interpretation The results generated from the statistical software will be compiled. Graphs and tables will be used to find out the trends over the year