EDUCATION AND MICROFINANCE AS A COMBINED
EMPOWERMENT APPROACH FOR THE MICROFINANCE CLIENTS: A Multiple Cases Study of Two Local Microfinance Organizations in
Bandung in Indonesia
A Dissertation Submitted
In Partial fulfillment of the Requirements For the Degree of Doctor of Education To the Department of Pendidikan Luar Sekolah
At the School of Postgraduate of Universitas Pendidikan Indonesia
By
Wamaungo Juma Abdu
NIM: 1103889
UNIVERSITAS PENDIDIKAN INDONESIA
APPROVAL
Promotor
Prof. Dr. Mustofa Kamil, M.Pd.
NIP: 196111091987031001
Co-promotor
Prof. Ace Suryadi, Ph.D.
NIP: 195207251978031001
Team Member
Prof. Dr. Achmad Hufad, M.Ed.
NIP: 195501011981011001
Endorsement of the Head of Department
Dr. Jajat S Ardiwinata, M.Pd.
iii
DECLARATION
This dissertation is presented in partial fulfillment of the requirements for a degree of Doctor of Education at the Graduate School of Universitas Pendidikan
Indonesia. The author has used different sources though there is no written request to the authors of the work(s) used in-here, appropriate academic procedures have been applied where necessary. The author has followed required academic rules in recognizing the varying contributions.
Bandung, 7th January 2014
Microfinance Clients: A Multiple Cases Study of Two Local Microcredit Organizations in Bandung City in Indonesia
ABSTRACT
This research is about the education and microfinance as an empowerment approach for the poor. The study attempted to examine and describe the education and microfinance integrated approach in poverty alleviation used by both MiSykat and BMT Khalifa to help empower the poor. This dissertation aimed: 1. to find out how MiSykat and BMT Khalifa describe their education and microfinance empowerment approach used in poverty alleviation; 2. to investigate how education and microfinance approach work to empower the poor clients of MiSykat and BMT Khalifa; 3. to examine how the education and microfinance approach support the enhancement of entrepreneurship knowledge and business skills of the poor microcredit clients; and 4. to establish themes which best describe the education and microfinance empowerment approach of MiSykat and BMT Khalifa.
To achieve the above objectives, the researcher conducted a qualitative study, using a multiple cases approach comprising two cases: MiSykat and BMT Khalifa. The interview technique, observation, and the study of documents were used. The data collection and data analysis resulted into a thesis and several major themes: the thesis being that “MiSykat and BMT Khalifa’s education and microfinance approach is different from the credit with education model of the Freedom from Hunger”. The education and microfinance approach of Misykat and BMT Khalifa is implemented based on religious values of Islam, while the credit with education model of Freedom from Hunger integrates education into a microfinance delivery system to address the informational as well as the economic and the complexity and scale of malnutrition of the poor.
The themes established included: community social change, holistic and all embracing community empowerment, push me to do the impossible, linking the poor based on solidarity, responsive mentorship, and knowledge with capital etc. The conclusion is that to help the poor it is important to understand their condition, the possible ways to help them, the possible measures, the appropriate implementation process, and the goals they wish to achieve. The researcher wishes to recommend that, “since education and microfinance approach has shown success in the cases studied, it possible to be implemented at a broader scale by the credit providers”. However, to be more appropriate further studies are needed (quantitative, action research and model development) to help establish a more appropriate solution to poverty alleviation.
TABLE OF CONTENT
APPROVAL ... i
DECLARATION ... ii
ABSTRACT ... iii
PREFACE ... iv
ACKNOWLEDGEMENT ... v
TABLE OF CONTENT ... vi
LIST OF TABLES ... ix
LIST OF FIGURES ... x
LIST OF APPENDICES ………. xi
CHAPTER ONE: INTRODUCTION ... 1
1.1 Background ... 1
1.2 Problem Identification ... 6
1.3 Problem Statement ... 10
1.4 Objective of the Study ... 10
1.5 Conceptual Framework ... 12
1.6 Significance of the Research ... 16
1.7 Scope and Limitation of the Study ... 18
1.8 Research Organization Structure ... 20
CHAPTER TWO LITERATURE REVIEW ... 22
2.1 Nonformal Education as an Empowering Process ... 22
2.2 Islamic Concepts on Empowerment and Poverty Alleviation ... 24
2.3 The Economy and Poverty in Indonesia ... 26
2.3.1 The Economy ... 26
2.3.2 The Poor and Poverty ... 29
2.3.3 Poverty Reduction Efforts in Indonesia ... 33
2.4 Education and Human Development ... 39
2.4.1 Education ... 39
2.4.2 Human Development ... 42
2.5 Microfinance in Indonesia ... 50
2.5.1 Social Business ... 53
2.6 Education and Microfinance ... 54
CHAPTER THREE RESEARCH METHODOLOGY ... 61
3.1 Qualitative Research Method ... 61
3.2 Multiple Cases Approach ... 63
3.3 Description of (City) Location of the Study ... 66
3.4 Research Guide (Instrument) ... 67
3.4.1 Interview Guide ... 67
3.4.2 Document Analysis Guide (Examining Records) ... 69
3.4.3 Observation Guide ... 70
3.5 Setting of the Study ... 72
3.5.1 Procedure of the Study ... 72
3.5.2 Subject ... 73
3.6 Data Collection Techniques ... 74
3.6.1 Interviews of the Microfinance Trainers and Trainees ... 74
3.6.2 Focus Group Discussion ... 75
3.6.3 Observation: Understand the Changes that Take Place Due to Integration of Education Services in Microfinance ... 75
3.6.4 Study of Documents: To Learn of the untold Documented Cases on Microcredit Education for the Beneficiaries or Clients 76 3.6.5 Audio-visual/Video Analysis: To Tress for the exact words of the Participant or Respondents ... 77
3.7 Data Analysis Procedure ... 78
3.7.1 Analysis in the Field ... 81
3.7.2 Analysis after Data Collection ... 82
3.8 Coding Categories ... 83
3.9 Authenticating and data verification ... 85
3.10Operational Definitions and Questions ... 85
CHAPTER FOUR DATA ANALYSIS, PRESENTATION OF FINDINGS AND DISCUSSION ... 88
4.1 Organization Background ... 89
4.1.2 Background of MiSykat ... 91
4.2 Presentation of Findings ... 93
4.2.1 Existing Education and Microfinance Approach ... 93
4.2.2 How Education and Microfinance Work to Empower the Poor 109
4.2.3 Education and Microfinance as an Approach in the Enhancement of Skills ... 130
4.2.4 Themes that best describe Education and Microfinance Empowerment Approach of MiSykat and BMT Khalifa ... 148
4.3 Discussion of the Findings ... 160
4.4 Resume of the Study ... 167
CHAPTER FIVE CONCLUSION AND RECOMMENDATIONS ... 172
5.1 Conclusions ... 172
5.1.1 The Existing Education and Microfinance Combined Approach 172 5.1.2 How Education and Microfinance works ... 172
5.1.3 Enhancement of Skills of the Poor ... 173
5.1.4 Themes that Emerged ... 174
5.2 Recommendations ... 174
5.2.1 Recommendation to Education and Microfinance Practitioners 174
5.2.2 Recommendation to Researchers ... 175
5.3 Findings of the Study ... 177
5.3.1 The Nature of Baitul Maal Wa Tamwil (BMT) ... 177
5.3.2 The Characteristics of the Clients ... 177
5.3.3 Education and Microfinance Approach ... 177
REFERENCES ... 179
LIST OF TABLES
Table 1.1: Participation in schooling in Bandung in 2007 ... 8
Table 3.1: Interview Research Guideline ... 68
Table 3.2: Document Analysis Instrument (Worksheet) ... 69
Table 3.3: Observation Guide ... 71
Table 3.4: Observation Guide: Specified Question ... 76
Table 3.5: Operational Definitions ... 86
Table 4.1: Illustration of the mentorship Activities ... 128
Table 4.2: Illustrating Practical Budget Developed by BMT Khalifa Clients Practical Knowledge ... 137
Table 4.3: Religious Values, Education, and Microfinance Curriculum ... 141
Table 4.4: Shows the Education Levels to Be Reached Misykat Clients ... 143
Table 4.5: Showing Integration of themes from Observation Data ... 149
LIST OF FIGURES
Figure 1.1: Credit with Education Benefits Process ... 4 Figure 1.2: Conceptual Framework ... 13
Figure 1.3: Elements of Education and Microfinance Cycle ... 14 Figure 1.4: Education and Microfinance Combined Approach Framework:
Summary of Findings of the Researcher’s Preliminary Study ... 16 Figure 2.1: Target Groups of Nonformal Education in Indonesia ... 23 Figure 2.2: Achieving Indonesia’s 7 percent annual growth target will require
labour productivity to grow 60 percent faster than 2000-10 ... 28 Figure 2.3: Poverty Reduction(s) in the Framework of National Development
Plan ... 33 Figure 2.4: Three Clusters in the Poverty Alleviation Program ... 37 Figure 2.5: Illustrates the Government Scheme on Protecting Rice
Consumption, Education, and Health of the Poor Households .... 38 Figure 2.6: Indonesia’s Development Phases for the Period 2005-2025 ... 44 Figure 2.7: Education and Economic Development, (1980–1996) ... 49 Figure 3.1: Map of Bandung Metropolitan Area ... 66 Figure 3.2: A Framework Showing the Process for Data Collection and
Data Analysis ... 80
Figure 4.1: An Illustration of BMT Khalifa’s Financial Management Education Progamme ... 111
LIST OF APPENDICES
Appendix 1 : Letter for Field Observation ... 186
Appendix 2 : Appointment Letter of the Team of Promotors ... 187
Appendix 3 : Letter From Misykat ... 189
Appendix 4 : Operational Guide of the Research ... 190
Appendix 5 : Activity Plan ... 191
Appendix 6 : Interview Transcript One (I) ... 197
Appendix 7 : Interview Transcript Two (II) ... 208
Appendix 8 : Intervew Transcrip Three (III) ... 218
Appendix 9 : Interview Transcrip Four (IV) ... 232
Appendix 10 : Interview Transcript Five (V) ... 237
Appendix 11 : Observation Comments ... 244
Appendix 12 : Document Content Analysis ... 258
Appendix 13 : List of Identified Themes ... 269
CHAPTER ONE:
INTRODUCTION
1.1 Background
To address the problem of poverty, governments the world over massively adopted and implemented the modern microcredit model, while to reduce the number of those leaving school prematurely and in an effort to avoid illiteracy the education for all (EFA) framework became a guide for most of these countries. However, poverty has continued to present itself in multidimensional ways. In developing countries, Indonesia inclusive poverty is caused by many factors which include unemployment. Heryaldi and Yusuf (2013) point out that “among the critical problems in Indonesia is underemployment and low absorption rate of the formal labour market, which absorbs only 60% of the working labour force of the country, where by the earnings are below the normal working hours”.
The situation is reported to have become worse after the economic and monetory crisis of 1997-1998. Several years after the Asian crisis, a majority of Indonesia’s population continues to live in poverty (Indonesia-European Community Strategy Paper, 2007-2013). According to the National Forum Coordination on Education for All (2005) the country’s economy experienced a negative growth and it became sluggish in the next years. 52 % of the population is estimated to be living with less than US$ 2 a day. Achieving Millennium Development Goals (MDGs) required targeting the poorest segments of the
population (Indonesia-European Community Strategy Paper, 2007-2013). To eliminate poverty several steps have been taken more so after the start of the reform period. Among such measures is mentorship as a nonincome component in poverty alleviation and capital provision to poor clients.
centralised approach to poverty alleviation and public consultations with government, universities, NGOs, donor organisations, economic players and poor
communities (Andrianto, 2006; Kikis 1999) indicate that “the centralized approach is outdated and that poverty alleviation should be specific to local
conditions. Poor communities should no longer be seen as objects of development, but rather participants to the solution”. The grass-root community organizations, religious organizations and also other non-government organizations were established. Some of these organizations have been and continue to offer education with credit Programmes. Among them is Misykat and BMT Khalifa. The present study attempts to examine and describe the education and microfinance integrated approach in poverty alleviation of both MiSykat and BMT Khalifa to help empower the poor in Bandung area.
MiSykat and BMT Khalifa approaches are different from the credit with education model of the Freedom from Hunger. The education and microfinance approach of Misykat and BMT Khalifa is implemented based on religious values of Islam. Islam teaches that “Everyone has a direction to which he turns”. According to Basri (2001), some questions may arise given the above verse. Among such questions are: 1. is the economic field of any role in helping a given community to realize its vision? 2. are the different communities having different visions? 3. can the prevailing differences get reflected in the social approaches to community development?
MiSykat and BMT Khalifa hold the view that Muslims have their own
According to a translation of Sunan Abu Dawud by Hassan (Book 9, Number 1637), it is revealed that the prophet Muhammad (peace be upon him)
empowered the poor by encouraging them to work. This is reflected in a hadith narrated by Anas ibn Malik (see chapter II of this report). The verse and the hadith
imply that every effort must be made to avoid poverty. Everybody is required to work to avoid living a poor’s life and of course a begging mentality. This makes accessing credit crucial in order to enhance entrepreneurship and self-employment throughout every strata of society for both women and men in Indonesia (Mustapha, R. B.; Jung-Kim, J and Zapata). Based on the above verse and hadith, Misykat and BMT Khalifa have integrated Islamic principles in their education and microfinance empowerment approach since they believe that Islam is the solution to the prevailing problems.
Figure 1.1 Credit with Education Benefits Process
Source: Adapted from Barbara MkNelly and April Watson, October 2003
This figure shows that inputs of credit and education channeled through women’s associations have the potential to produce intermediate benefits, or first-order effects, which include change in knowledge and practice, increased self-confidence and improved income savings (MkNelly and Watson, 2003). The implication of this framework is a proof that education is the best effective tool for human transformation. Through education people work cooperatively and serve each other (UNESCO, 2006), and are also empowered. Thus, the
integration of training activities in microfinance services for the empowerment of clients is a proof that in today’s world, the academics, practitioners, and professionals of microfinance have accepted that there is need for a shift in the microfinance sector which need reform in service delivery to the poor people.
Providing education to microfinance clients on topics ranging from marketing to reproductive health is one of the key ways in which microfinance institutions (MFIs) can serve the broader needs of their clients (Capsuto, 2010). Ideally, this implies that a combination of microfinance and other development services (Dunford, 2002) such as education can help to eliminate the multiple
Misykat and BMT Khalifa’s education and microfinance approaches in the empowerment of the poor clients. The two cases are just a small sample of Baitul
Mal Waatamwil (BMTs). In Indonesia, microcrocredit organisations are divided
into different categorises.
According to Possumah and Baharuddin (2012) they refer to Baitul-Mal as one of the financial institutions in Islam. They further refer Baitul Mal Waatamwil as an alternative Shariah financial institution that has a social and productive dimension at both national and even global scale to foster Islamic economic development. In Indonesia, Islamic banking was started in 1992 with the establishment of Bank Muamalat Indonesia (BMI) which served as the first Islamic Bank in the country. The establishment process was supported strongly by the government. There was a community gathering in Bogor, West Java led by President Soeharto to raise the initial capital of the bank (Budi, 2007). Since 1995, Baitul Mal Waatamwil, as an alternative financial institution for the lower income groups of society has developed and grown rapidly (Hamzah, Rusby and Hamzah, 2013). It has been proved by the data taken from Incubation Center of Small Business (PINBUK) on 12 February 1998, that there were around 2000 units of BMTs established in Indonesia, but only 384 units of BMT registered in PINBUK, within a total number of investors being 79,325 people, and a total number who receive financing being 28,430 people, with the total amount of financing being IDR 11 billion (± MYR 31 million) (Hamzah, Rusby and Hamzah, 2013; Adiwarman, 2009).
Zahria (2012) has “established that there were approximately 3900 active BMT by the end of 2010. Total assets under management reached a value of Rp 5 trillion; customers served were around 3.5 million people, and the number of workers was approximately 60,000 people across Indonesia. In 2010, for West Java, it is reported that, according to the development trend, the polarization of economic activities in the region mainly the central region, growth (core areas) grew stronger, while the peripheral regions, called the rural, semi rural,
rich and the poor widened. The poor areas grew became more poor because of the unequal distribution in development”.
1.2 Problem Identification
Just like the researcher mentions in the background, this research emanates
from a prior study which was about the “Post-Literacy Microcredit Social Empowerment Model (PMSE-M)”. Several issues were noted which have been raised in this research since it was the foundation of this Dissertation. In a prior study conducted in Bandung in 2010, it was established that:
1. Indonesia’s literacy programme faced a lot of challenges which included the re-emergence of post-illiterates and the limited facilitation of the programme. This was said to be related to wide spread unemployment and poverty which are still some of the main problems faced by Indonesia more so the West Java Province.
To back-up this point, the August (2009) report on employment, reported that 8.96 million people were unemployed, that is about 7.87 percent, from a working age population of 113.83 million people. And according to the Indonesian Bureau of Statistics report of February 2009, 27.09 percent were graduates of primary education and below, 22.63% were graduates of first class of junior secondary education, 25.29% were graduates of the advanced level secondary education, 15. 37% were graduates of the vocational schools and 9.63% were diploma level and degree level graduates.
And also, a total population of 10% was said to be a population of those who did not get chance to obtain the formal education. The latter was said to be the most disadvantaged group having no hope for the future, hence leading to a total vicious circle of poverty, being the biggest factor for unemployment and of course wide-spread poverty in Indonesia. 2. To be specific, the following were the identified main problems:
There was lack of or inappropriate skills in relation to the required competences needed by the job market;
The high rate of school dropout which continuously contribute to unskilled labour;
The rate at which people are stopped from work also became high due to lack of proper workers’ policies for both the Government and the Private sector; and
Also lack of effective literacy programme that combined the cognitive, affective and psychomotor aspects in order to improve the life of the disadvantaged groups including the poor.
Being specific about Bandung city, several problems were identified. When the researcher visited the city council, was referred to the Centre for Statistics (BPS) in Bandung which is located on Suci Street. According to the literature obtained, the following was established:
1. Demographic composition: a survey on the management of BOS in Bandung city of 2010 revealed that Bandung city has a population of 2,329,928 people and according to the 2008/2009 BPS statistic it is categorised in groups of the productive age population which is the ages of 20-24 years old (227,781 people), followed by 25-29 years old group
(242,637 people), 30-34 years old group (210,437 people), and 15-19 years old group (207,967 people). This composition is influenced by the quality education in the region, implying that the majority population are the young generation with weak economic muscles. Besides education, the other factors acting as a pool of people to Bandung city is the promising business climate, like the service industry, trade and other promising sectors.
unemployment rate in Bandung stands at 12%, meaning that the 12% needs special attention to prevent economic hardships. Among them
include the microfinance clients who are among the vulnerable groups, they are majorly from the very poor families with no special programme
for their knowledge and skills improvement.
3. Education: the report also presents data from the national statistics department (BPS) of 2008/2009, showing the the education level of the people of Bandung city. It reports that 528,685 people out of the total population are elementary school (SD) graduates, while 636,224 people are said to be graduates of high school. The table belwo shows the particition rate in schooling in the year 2007.
Table 1.1: Participation in schooling in Bandung in 2007
Education Male Female Number
Not/not yet attended school 2,481 9,278 11,761
Still attend school 213,145 168,240 381,588
No longer attend school 775,099 802,852 1,577,746
Total 990,725 980,370 1,971,095
Source: Bandung Dalam Angka, BPS, 2007; A Report on the Survey of BOS,
2010
From this table, we note that the school going population is 381,588 people, while those not attending school are 1,577,746 people. If compared to the population in school, this group comprised of 25% of the population. This is quite a big population that needs attention and proper programmes including competence or knowledge and
4. Macroeconomic growth of Bandung city in 2008: Still BOS survey report
shows that there was significant improvement in the education and health sectors of Bandung City. The revenues are reported to have increased by 20% this implied that the aggregate performance of the economy of Bandung City improved significantly.
1. However, in the same period, it is noted that the microfinance banking sector provided many types of financial services to small and micro
customers, which fall generally into the categories of loans/credits of various types and saving facilities (The Asia Foundation, 2002). Yet the
microfinance clients rarely have any formal training in business skills (Karlan, and Valdivia, 2009), neither do they have any programme on entrepreneurship knowledge development something that renders them disempowered in the changing business climate.
2. There is increasing competition in the microfinance industry, many of the institutions are struggling to establish new clients or retain existing clients whose needs or expectations have changed. Some of the microfinance institutions have tried to develop new products including the social business approach to the clients. In the process education is part of the service menu for the clients. In Indonesia, small financial providing institutions to the poor have moved away from the credit perspective. They have incorporated education activities in the microfinance programme to empower their clients and ensure efficient service delivery to the clients. The institutions are then categorized as the formal, semi-formal, Informal microfinance institutions and also government programmes.
3. Though education and microfinance is taking root in most of the micro-lending industry, for Indonesia, little is known. In this research I intend to
Valdivia (2009), they found that effects of training on institutional outcomes such as repayment and client retention.
1.3 Problem Statement
Since the microfinance clients comprise of mostly the disadvantaged
people in society, the normal existing human resource development system does not cater for their education and learning needs. This is made worse by the fact that though there are many studies which have been conducted about the economic influence, and the impact of the empowerment programme of Misykat and BMT Khalifa, the education and microfinance approach has had little attention by academics, researchers and students alike. Hence, making the existing education activities integrated with micro-lending activities of BMT Khalifa and MiSykat less researched and less promoted, calling for special attention. Based on this, the current study sought to answer the following questions.
1. How is the existing education and microfinance combined approach for the empowerment of the microcredit clients of both Misykat and BMT Khalifa?
2. How does the education and microfinance approach work to empower the poor clients of MiSykat and BMT Khalifa?
3. How does the combined education with microfinance approach support the enhancement of skills of the poor microcredit clients of MiSykat and BMT Khalifa?
4. What are the themes that appropriately describe the education and
microfinance combined empowerment approaches of MiSykat and BMT Khalifa in Bandung city?
1.4 Objective of the Study
1. To find out how MiSykat and BMT Khalifa describe there education and microfinance empowerment approach for the poor microcredit clients;
2. To investigate how education and microfinance approach work to empower the poor clients of MiSykat and BMT Khalifa;
3. To examine how this education integrated with microfinance approach supports the enhancement of entrepreneurship knowledge and business skills of the microcredit clients; and
4. To establish themes which can describe appropriately the condition about education and microfinance empowerment approach for the poor microcredit clients of Misykat and BMT Khalifa.
Currently, there is no research about Indonesia’s education and microfinance approach yet almost most BMT’s are used this similar approach.
The research used a qualitative method with the help of a multiple cases approach to establish and describe the approach in use. The study involved collection of the data, field analysis and immediate desk top analysis and sorting out, compiling of the data and interpretation to extract meaning, and analysis of the data to answer the questions of the study. The field research activities comprised of a review of the literature, preliminary study, trial of questions and redesigning the questions for the final study, gathering data through interviews, observation, recording, use of telephone, coding, and transcription and authenticating the data. The researcher decided to carry out a qualitative research using a multiple cases study method, because currently education integrated with
microfinance programmes need a thorough investigation if one is to understand how the approach operates and what might be the existing variables for the future research.
empowered and they are actively involved, while the organization staff are the out-side or in-side members of the community who are genuinely working to
empower the grass-root community through education and microfinance.
1.5 Conceptual Framework
A conceptual framework explains, either graphically or in narrative form, the main dimensions to be studied, the key factors, or variables, and presumed relationships among them. Thus, frameworks come in several shapes and sizes. They can be rudimentary or elaborate, theory driven or commonsensical, descriptive or causal (Miles & Huberman, 1984: 28; John W. Creswell, 97). Thus, in this research, the conceptual framework has been designed based on the problems which were identified during the preliminary study and also the theories discovered during the study of the various literature, which in turn has been developed to help in answering the problem of the research. This conceptual framework is therefore expected to act as guide in the identification, planning, development and implementation of the study. In the case of this research, poverty is seen as a big problem which comprises of all evils: it kills, it makes one turn into a dangerous creature, and it leads to powerlessness. Poverty is concentrated mostly in developing countries including Indonesia. It contributes to no education or school dropout and also deaths in some families. Worst of all, it also leads to incompetent human resources and luck of family income(s). This has led to innovations which have led to a shift within the microfinance industry. Nonfinancial services have been introduced. The framework is presented as in
The education and microfinance is an innovation which aims to transform the lives of poor people both economically and in skills and knowledge. The idea emerged from the efforts of the Freedom from Hunger’s initiatives and desire to avert the suffering caused by poverty and hunger more so in the poor communities. The credit with education model developed by Freedom from Hunger takes in consideration nutrition, food security and poverty alleviation.
Organizations in Indonesia have implemented almost a similar approach but in a different perspective. In other words with some modifications to suit the local condition of the country, the Indonesia one, the attempt is to look at a human being as a holistic creature who is only curtailed with the limited knowledge and lack of financial resources and others components like nutritional components and
food security are just, but a cause of poverty.
Figure 1.3 Elements of Education and Microfinance Cycle
The figure 1.3 above describes the overview of a cycle of education and microfinance in the two selected credit organizations where the research was conducted, established during a preliminary study. It reflects the activities taking place in these organizations.
Community potential is considered an important element the condition about a given community’s potential is attained through mapping. Mapping is carried out to identify as well as to register the qualifying community member who fulfills the organization’s criteria. Once one has fulfilled the selection criteria, is expected to go through training before is allowed to attain credit and
also to continue with receiving the mentorship services. All this is done to create a productive economy where there is change in social status, increased incomes, increased knowledge and skills which in turn are expected to lead to a self-reliant and self-sustaining community or individuals. This implies that each individual must be equipped to seize learning opportunities throughout life, in order to broaden knowledge, skills and attitudes and to adapt to a changing, complex and interdependent world (Delors, 1996). The prime objective is to increase the
Therefore, in this research, the priority is the human being who is the client of microfinance services. Because of the human nature, the microfinance sector
which has changed, prioritizing people has become common. Education programmes have entered the system of the industry, since financial needs and people’s changes are expected to suit a given situation and of current, the knowledge economy which looks at “human capital” as a very important aspect, has led to all the possible innovations which can help to strengthen the services of the microfinance industry in helping the poor communities.
The illustration 1.3 below was designed during the Preliminary study. In the preliminary study, it was established that the education activities integrated with microfinance are nonformal education activities. They Include: Training, Mentorship, Life Skills, Entrepreneurship community education, Religious and value education, and Family care, nutrition and health education, while the microfinance services are also carried out to suit the community groups or the target group, among the services include: Credit and loaning scheme for the poor, Savings for the poor and insurance packet for the poor. They education activities were considered nonformal due to the way they are implemented and the principles being used.
The education and microfinance as an approach combines the education with credit programmes which are run concurrently. In this research the approach is then described as a “Combined” approach. The activities in the combined approach include: Increased food security, Nutritional status, Productive economy
Figure 1.4 Education and Microfinance Combined Approach Framework:
Summary of Findings of the Researcher’s Preliminary Study
Training, Mentorship, Life Skills, Entrepreneurship community education, Religious and value education, and Family care, nutrition and health education Nonformal Education Credit and loaning scheme
for the poor, Savings for the
poor, and Insurance packet for the
poor Credit with education model: Increased food security, Nutritional status, Productive economy work, Rotating funds etc, Family education Microfinance
Services NFE & MFS 1. Productive economy 2. Self-reliance and self-sustaining, 3. Self-confident, and 4. Household incomen Outcomes 1 2 3 2 1 4
This empirical education and microfinance figure summarizes the findings during the preliminary study. In this final research, it has been used as one of the basis for the conceptual study. A conceptual framework explains, either graphically or in narrative form, the main dimensions to be studied, the key factors, or variables, and presumed relationships among them. Thus, frameworks come in several shapes and sizes. They can be rudimentary or elaborate, theory driven or commonsensical, descriptive or causal (Miles & Huberman, 1984: 28; John W. Creswell, 97). Thus, in this research, the conceptual framework has been designed based on the problems which were identified during the preliminary study and also the theories discovered during the study of the various literature, which in turn has been developed to help in answering the problem of the research.
1.6 Significance of the Research
sector. It is to help us understand how important can education practices be in the other fields for this case the microfinance industry. This research will play the
following role:
1. In the first place, this research is significant to knowledge improvement.
Just like any other research, this study has contributed to my understanding. It has helped to increase my knowledge and probably it will contribute to the knowledge of others: students, researchers, policy makers and practitioners of microfinance and of course education for business or entrepreneurship.
2. Second, this research is to contribute to the practice of education integrated with microfinance services. Because of the changes taking place. Debates have risen on the need to integrated nonfinancial services to the microfinance sector. Education is among the key priorities to the sector. Due to the fact the microfinance industry is changing at a rapid pace hence in need for constructive innovations.
3. Third, this research though not its aim, will also contribute to policy debates. Before policies are implemented, surveys are carried out establish the existing gap and how policies can help fill the existing gap. I therefore hope that this research will also play a significant role in informing debates.
4. Fourth, it will contribute to the educational programme of the microfinance institutions. In the recent decade, researchers and
5. Fifth, it will contribute to research integrating education and microfinance programmes. Helping to facilitate the shift from the social
conscious nature to the new product approach in providing services to micro-entrepreneurs. Historically, the promise of poverty alleviation
through microcredit was tied primarily to one product: the productive loan invested in a microenterprise, delivered primarily by one type of provider, a microfinance Institution (Ledgerwood, Earne, and Nelson, 2013). Now, education is recognized as key to development and community transformation. This has led to the discussion human capital and human investment. Entrepreneurship education has been recognized and now integrated with microfinance as a knowledge transfer of how, by whom and with what effects, opportunities to create future goods and services (Hindle, 2007; Fayolle, 2010). This therefore implies that the other significance of this research is its contribution to human capital development within the microfinance industry.
6. Sixth, it will contribute to community empowerment. Today, most governments around the world have adopted microfinance as a tool for poverty alleviation and human welfare. However, with the changing nature of the industry, education has become a vital component within the industry. As we might be aware, the self-employed poor rarely have any formal training in business skills (Karlan and Valdivia, 2009). A research of this kind, will obviously contribute to the training of the
microfinance clients, to help them cope-up with the rapidly changing world where one to survive, should be prepared to learn to new things, and
7. Lastly, it will also help to contribute to some of the problems faced by the microfinance and the post-literacy programmes in today’s world.
1.7 Scope and Limitation of the Study
documents related human development, education rate of return, human investment, human capital and financial literacy and the microfinance industry in
general.
The Study is limited to studies of 2001 to the present. The studies include:
The new microfinance hand book by Ledgerwood, Earne and Nelson (2013), Teaching entrepreneurship and impact of business training on microfinance clients and institutions by Karlan and Valdivia (2009), A model for microfinance-supported education programs by Khumawala at the University of Houston (2009), Business training for Microfinance clients: How it matters and for whom by Frisancho, Karlan, and Valdivia (2008) and many others raging between 2001 to the present time.
The geographical location of the research was Bandung city. The researcher purposively selected two BMTs, namely: BMT Khalifa and Darut Tahuhiid BMT programme of Misyikat. These institutions were chosen because they are those few institutions integrating education with microfinance in their programmes for community empowerment and they are among the organizations which during the preliminary survey showed the readiness to help the researcher gain access to their education and microfinance programme. Besides they have also been in existence for an average period of 5 years and the most important point is that they have involved community members’ right from the start. Because one of the researcher’s previous researches was about the “Role of Community Participation in the Development of Nonformal Education Programmes through Community Learning Centres”, it was more beneficial to take cases of the organizations which focus much on the client rather than the services they offer.
According to the prior study, it was found out that BMT Khalifa was established due the community needs. One of the reasons was poverty and low
level of education of the community around the present BMT Khalifa offices. Darut Tahuhiid also started its services for the poor to help those who had
problems with mobile banks or (Bank Keliling).
In this research the researcher seeks to investigate the education and microfinance approach in the empowerment of the microcredit clients in the two organizations of MiSykat and BMT Khalifa. The researcher wants to know whether education and microfinance empowers the poor and whether it helps them to improve the entrepreneurship knowledge and business skills.
1.8 Research Organization Structure
This report is organized of five chapters (5). Each chapter is summarized as below:
I. CHAPTER ONE: INTRODUCTION: This chapter is comprised of the background, Problem Identification, Problem Statement, Objective of the Study, Conceptual Framework, Significance of the Research, Scope and Limitation of the Study and Research Organization Structure.
II. CHAPTER TWO LITERATURE REVIEW: While chapter two (2) leads us to the literature review try to shape the research and give it fresh in relation to concepts and theories about the Economy and Poverty in Indonesia, Nonformal Education as an Empowering Process, Islamic Concept, Education and Human Development , Microfinance, and
Education and Microfinance.
III. CHAPTER THREE RESEARCH METHODOLOGY: Chapter three (3) presents the research methodology employed in the study, Qualitative Research Method, Multiple Cases Approach, Description of (City) Location of the Study, Research Guide (Instrument), Data Collection Techniques, Data Analysis Procedure, Coding Categories and Authenticating and data verification.
analysis, presentation of findings and discussion. It consists of Organization Background, Background of Misykat, Background of BMT
Khalifa, Presentation of Findings and Discussion of the Findings.
V. CHAPTER FIVE CONCLUSION AND RECOMMENDATIONS: chapter
CHAPTER THREE:
RESEARCH METHODOLOGY
The purpose of this study was to examine and describe the education and
microfinance approach used in the empowerment of the poor microcredit clients of Misykat and BMT Khalifa in Bandung city. A multiple cases approach was used. This approach is used to examine several cases ranging from two to as many as possible (Creswell, 2008) cases. With this approach, the researcher scouted for possible places and people (Bogdan and Biklen, 1982) that were considered as subjects of the study. In this chapter, the following sections are described: (1) qualitative research method, (2) multiple cases approach, 3) location and subject of the study, (4) research guide (instruments), (5) setting of the study, (6) data collection techniques, (7) data analysis procedure, (8) coding categories, and (9) authenticating and data verification. This research was conducted to answer the questions:
1. How is the existing education and microfinance combined approach for the empowerment of the microcredit clients of Misykat and BMT Khalifa?
2. How does the education and microfinance approach work to empower the poor clients of MiSykat and BMT Khalifa?
3. How does the combined education with microfinance approach support the enhancement of skills of the poor microcredit clients of MiSykat and
BMT Khalifa?
4. What are the themes that appropriately describe the education and microfinance combined empowerment approaches of MiSykat and BMT Khalifa in Bandung city?
3.1 Qualitative Research Method
approach to the study of social phenomena where the researchers are oriented towards the natural world. Qualitative research often involves the simultaneous
collection of a wealth of narrative and visual data over an extended period of time and as much as possible, data collections occurs in a naturalistic setting ( Gay,
Mill and Airasian, 2006).
One of the main characteristics of a qualitative research is its focus on the intensive study of specific instances that is cases, of phenomenon (Gall, Gall and Borg, 2003). The purposes of qualitative research are broad in scope and centre around promoting a deep and holistic or complex understanding of a particular phenomenon (Gay, Mill and Airasian, 2006). In this research, the researcher used a qualitative multiple cases method.
The researcher decided to use qualitative method because of the case of research which is education and microfinance. This area of study is still new moreso for the case of Indonesia. Therefore it is limited in concept, theory and variables. Because the education and microfinance is limited in theory, concept and variables, it requires a thorough examination or investigation to contribute to theoretical writings (Burgess, 1985) of the field. The method helped the researcher to examine the education and microfinance combined approach by observation of the clients, and focal persons of MiSykat and BMT Khalifa, situations and events (Burgess, 1985) under which they operate and they way they define and implement their programmes for client empowerment.
In the study, some of the attributes below were observable to some extent: The focus was on programme implementation but the discussions were
some how focused on the social, cultural and historical framework (Burgess, 1985) of the organizations and their clients.
The researcher moved to the field with a limited number of questions to orient a study (Burgess, 1985), more of the questions evolved during the researcher‟s mingling with subjects to the study.
through observation, interviews, audio-visual recording and the study of documents.
The qualitative method was used to critically investigate the approach being used. The intention was to establish necessary concepts and to establish themes that
describe the subjects of the study.
3.2 Multiple Cases Approach
A multiple cases approach was used. This approach is at times called a collective case study (Creswell, 2008; Stake, 1995). In this study, two cases were examined. Therefore, this research comprised of two case studies which were purposively chosen. The cases of the study were BMT Khalifa and MiSykat community empowerment programme of Dompet Peduli Ummah- Darut Tahuhiid (DPU DT) in Bandung city.
BMT Khalifa: is a community based sharia microfinance institution founded in 2007. It is dedicated to serving and assisting the grass-root communities. It started as a Non-government organization which served as a mosque help group in Kebon Gedang and one of its activities was to provide and distribute subsidized cooking oil and rice. With time, and in relation to a decree by the college of scholars of Indonesia (Majelis Ulammah Indonesia-MUI) forbidding conventional banking transactions which they said had elements of riba, community members volunteered to establish an Islamic Finance Unit, which was eventually named Sharia microfinance Institution (now BMT Khalifa). This cooperative started to operate on 6th June, 2006 after the establishment of a
management structure. According to Teh‟ Nurul, the fundamental principle of BMT Khalifa is being conscious of the creator. The goal is to collect and channel funds to its registered members and the grass-root communities who are in need of improving their economic life.
BMT Khalifa offices are within Bandung city, the capital of the West Java Province on Jl. Kebon Gedang, Number 80, Bonanza, Batununggal Bandung 40274. The following are objectives of BMT Khalifa:
To develop the people‟s potential such that they are able to participate and
To pioneer economic empowerment of the grass-root communities and
minimize unemployment rate.
To participate and help eradicate poverty through BMT Khalifa‟s poverty
alleviation programme.
To create the source for financing and provision of capital to small scale
medium businesses (micro-businesses of the poor).
To nurture an attitude and culture of saving through motivation and
sensitization on the importance of saving.
To strengthen the bond of brotherhood through networking of the clients.
Microfinance Syariah Berbasis Masyarakat: which is shortened as MiSykat is translated to English as “Community Based Sharia Microfinance”. It is an
empowerment programme for the poor. This programme categorises the poor in two groups: the poor people (they own some property but they cannot fulfill most of their basic needs), and the extremely poor (this group of people hardly owns anything except life). It depends on social assistance programme for survive.
Besides being known as a programme, it is also an empowerment Wing of the Dompet Peduli Ummat Daarut Tauhiid (DPU DT) which is a nonprofit organization owned by people engaged in the collection (fundrising) and utilization of zakat (Alms, and Charity) as well as other funds which are halal and legal from individuals, groups, companies or institutions.
MiSykat was established on 16th June, 1999 by KH. Abdullah Gymnastiar (Aa Gym) as part of Daarut LAZ Tauhiid foundation. DPU DT Amil Zakat was
Dompet Peduli Ummat Darut Tauhiid which is the mother organization of MiSykat is found at Gedung Pemberdayaan Ummat on Jl. Gegerkalong Girang
street No. 32 in Bandung city. More of the information can be found on Website: www.dpu-online.com or contact E-mail: info @ dpu-online.com. The mission of
MiSykat:
The general objective of MiSykat is to empower the poor communities and support self-reliance.
The specific objective is to lead those unable to a level of being able, through mentorship process until they attain a level of self-reliance.
These objectives are to be achieved by: promoting self-reliance through credit and saving programme integrated with education for human development.
According Bogdan and Biklen (1982), the start of the study is the wide end: the researchers scout for possible places and people that might be the subject or the source of data, find the location they think they want to study and then cast a net widely trying to judge the feasibility of the site or the source (Bogdan and Biklen, 1982). In this research, the researcher investigated and examined purposively these selected credit institutions.
The researcher wanted to discover how these institutions have implemented a combined approach of education and microfinance in the empowerment of the poor microcredit clients. However, this does not make the study representative of what is taking place in the broader microfinance industry of Indonesia, since a few cases have been involved. They are only to help provide a rough picture of what is going on in the microfinance sector which have integrate nonfinancial services such as education with credit services within the Indonesian context.
3.3 Description of (City) Location for the Study
A multiple cases method was used. The research comprised of two case
studies which were purposively chosen. They were chosen based on the research focus. The research examined education and microfinance as a combined
[image:37.595.117.521.314.696.2]empowerment approach for the poor microcredit clients of MiSykat and BMT Khalifa. These two organizations are both located in Bandung city, found in the West Java Province in Indonesia. Bandung is the provincial capital of the West Java Province and Indonesia‟s third largest city. Situated on a plateau in the beautiful Parahyangan Mountains, Bandung's pleasant climate and lush surroundings have offered an escape from the heat of the lowlands since the mid 19th century when it was the heart of the region's most prosperous plantation area. (http://www.fnetravel.com/travel_info/english/). The figure 3.1 below is a map of Bandung Metropolitan Area:
Figure 3.1 Map of Bandung Metropolitan Area
The research focused on the study on the education and microfinance as an approach used in poverty alleviation and empowerment for the poor microfinance
clients by MiSykat and BMT Khalifa in Bandung city. However, since there are no specific maps on the location of the cases of research, the researcher presents
the map of the metropolitan area of Bandung city as seen above. The research was carried out to examine a combination of education and microfinance as a new empowerment approach for the poor clients of the sharia microfinance institutions in Indonesia, only with a purposively selected sample in Bandung city.
3.4 Research Guide (Instrument)
The data collection process consisted of in-depth interviews, study of documents (both print and electronic), audio-tapes analysis, and observations conducted in the two institutions mentioned. This research helped to gain a deeper understanding of the topic and the problem of the study. The researcher visited the field for about 15 times until the required information was obtained. The research was about education and microfinance but the researcher did not intend to study the clients neither did the researcher aim to study the staff nor managers of microfinance service programmes, but the approach itself.
Thus there were instruments used to collect the data. A research instrument is a tool used to collect data by the researcher. All kinds of research have research instruments. In qualitative research, the researcher uses observation research instruments, interview research instruments and among others. According to Fraenkel and Wallen (2007), research instruments can be classified in many ways.
Some of the more common are in terms of who provides the data, the method of data collection, who collects the data, what kind of response they require from the subjects (Fraenkel & Wallen, 2007). In this research the instruments used included: observation forms, and interview guide, and document analysis, below is an elaboration on each of the instrument used.
3.4.1 Interview Guide
multiple-choice format. In contrast to the questionnaire, the interview is flexible; the interviewer can adapt the questions to fit each participant (Gay, Mills &
Airasian, 2006). One of the principles of the interview instrument is that it helps the interviewer monitor the pace and direction of the social interaction as well as
[image:39.595.114.516.219.757.2]the content of answers and behaviour of the respondents and the interviewer does not show shock, surprise, or disdain but treats the answer in a matter-of-fact manner (Neuman, 2003). The table 3.1 below illustrates an interview instrument guide:
Table 3.1: Interview Research Guideline
Introduction Key Components:
1. Introduction of the researcher
2. Purpose of the interview 3. Duration of the
Study 4. Process of
conducting the Interview 5. Presentation of
sample questions 6. Word of thanks
Dear Manager,
It is Juma Abdu Wamaungo, a student at the Indonesia University of Education (Universitas Pendidikan Indonesia). I have come with the intention to carry out research in your organization. I will recommended by the team of promoters for the dissertation. They told your organization offers credit services integrated with education and since this is inline with the focus of my research, I request for your permission to allow me observe, interview and access documents of your organization.
However, in the beginning, I will carry out interviews with the focal person in your organization and focus group discussion with a small group among some of you clients. It will be conducted in 6 meetings, and each meeting will last for 30minutes.I hope I don‟t interrupt your schedule and that of your clients.
I will be grateful if given chance to learn from your organization activities. I look forward for your favour.
Best Regards
Juma Abdu Wamaungo
Universitas pendidikan Indonesia
Jl. Dr. Setiabudhi No.229 Bandung Indonesia Questions comprised
of Issues concerning the themes:
Empowerment Education Credit for social purpose
Credit for the poor Religious values in credit services Sustainability and people productivity
Before I came to the field the question I asked were: 1. How does Misykat empower its clients?
2. Are there any existing education activities in the credit and empowerment programme for the poor?
3. How is the existing education programme? 4. How is it integrated with credit services?
5. How does education and microfinance promote client empowerment?
6. How does the approach contribute to the knowledge and skills f the clients
7. What kind of empowerment has the programme brought to the life of clients?
9. Is the financial help to the poor with interest or interest free?
10. Are there challenges in implementing education with credit?
11. How have managed to overcome such challenges
12. In what way do you work with other partners to serve the poor?
13. Is there any existing education model for the poor? 14. How do ensure sustainability of the programme for the
poor.
15. Are there any outcomes registered by Misykat?
3.4.2 Document Analysis Guide (Examining Records)
Qualitative research involves a number of different data collection strategies (Gay, Mills & Airasian, 2006). This includes analysis of documents. Various types of records were analyzed. The instrument used to examine the documents was document analysis instrument. Documents or records are used to provide the researcher with valuable (Gay, Mills and Airasian, 2006) information.
[image:40.595.107.516.102.746.2]According to Gay, Mills and Airasian (2006), there are various types of records or documents, including archival documents, journals, maps, videotapes, audiotapes and artifacts. For the case of this research, the researcher used the organization documents. These documents were provided by the focal persons in the two organizations. Besides, the researcher also used other documents like researches which of the previous had been conducted on the condition of the two organizations and with current developments in information, technology and communication (ICT), the researcher also used the organization websites to dig for more data. The table 3.2 below illustrates Document analysis instrument:
Table 3.2: Document Analysis Instrument (Worksheet)
1. Type of documents analyzed: Activity photo documents
Audiotape/ audio-video documents
Organization reports
Organization activity documents
Organization Website notes
Organization profile and also
Research reports about the programme of th organizations
2. Time of obtaining the documents:
3. Author of the documents:
Activity photos - field team of the organization
Audiotape/Audio-video- field team of the organization and the researcher Organization report- organization experts
Research report authors:
4. Audience of the document:
Most of these documents were written for the clients and some for the public and some to the academics and others to the organizations themselves.
5. Document information:
a. List important pieces of information presented in the document.
__________________________________________________________ __________________________________________________________ __________________________________________________________ b. Why was the document written?
__________________________________________________________ __________________________________________________________ c. What evidence in the document helps you to determine why it was written?
Quote from the document.
__________________________________________________________ __________________________________________________________ __________________________________________________________ d. What historical event(s) does this document refer or pertain to?
__________________________________________________________ __________________________________________________________ __________________________________________________________ __________________________________________________________ e. Write a question to the author that is left unanswered by the document.
__________________________________________________________ __________________________________________________________ __________________________________________________________
Source: Adapted from one designed and developed the National Archives, Washington, D.C. The Huntington (http://www.google.com/)
The table above though adapted from another sources, it was used as a guide during this research to obtain the document notes. The researcher adapted this
from Huntington School Programme working sheet which is got from Google source.
3.4.3 Observation Guide
obtained through discussion or document analysis. Observation was conducted right from the beginning of the field study.
Observation requires one to be careful while in the field. The way things are interpreted varies from researcher to researcher, but at times different researcher
[image:42.595.113.513.265.648.2]may come to similar conclusions. In observation, one can design questions according to what data is required or one can also develop questions depending on the focus of the observation. Observation can help the researcher to acquire information right from the source or the subject of research without much contamination. A researcher as an observer is interested in the information of only if (and in ways that) they relate to (Bogdan and Biklen, 1982) the topic of study. According to Neuman (2003), observing in field research is often detailed, tedious work. In observation, the researcher records details because something of significance might be revealed (Neuman, 2003). This something of importance should of course be related to the topic in focus. There are several guides to help in observation but for this study, the researcher used the following table 3.3 to obtain information through observation.
Table 3.3: Observation Guide
Research Area Bandung city Locality of the Research
Site
Kebon Gedang and Gegerkalong both localities situated in Bandung city.
Researchers/Research Assistants
Juma Abdu Wamaungo and Research Assistants were: Aloise, Heise, Devy, and Esih Sukaesih. Observation time From May to July/August, 2013.
Points of Observation Organization Activities in relation to Education in credit services:
a. Programme implementation b.Training activities
c. Client activities d.Site setting etc
e. Used research questions for observation
3.5 Setting of the Study
A research study does not take place in a vacuum but in a place whereby a
researcher can get information for his or her study. This study took place in two non-formal microfinance institutions both located in Bandung city. Bandung is the
capital city of West Java province in Indonesia, the country's third largest city, and second largest metropolitan area in Indonesia with a population of 2.4 million (According to 2010 Bureau of Statistics Data-BPSN). It is located 768 meters (2,520 ft) above sea level, approximately 140 km South-East of Jakarta, Bandung has cooler temperatures year-round than most other Indonesian cities. The city lies on a river basin surrounded by volcanic mountains.
3.5.1 Procedure of the Study
Procedure of a study in a qualitative research may have varying forms and degrees of specificity depending on whether or not the researcher has been able to undertake any pre-proposal fieldwork (Gay, Mills and Airasian, 2006). On the same hand Fraenkel and Wallen state that procedure of the study is what a researcher will do (what, when, where, how and with whom) from beginning to the end.
Creswell (2006) advises us to design a qualitative data collection procedure for our educational project. He further states that we should determine the people and research sites we will study and the type of purposeful sampling we will use. Next, we need to list the steps we would take to gain permissions to enter and study the people and the site. We also need to identify the types of qualitative data
we will collect and the forms for recording the information. Finally, we need to list the anticipated field and ethical issues that we need to consider before we conduct our data collection.
3.5.2 Subject
The first step in the process of collecting qualitative data is to identify the people and places you plan to study. This involves determining whether a researcher will study individuals or entire organizations (e.g., schools, institutions) or some combination. If a researcher selects either individuals or organizations, he or she needs to decide what type of people or organizations he or she will actually study and how many he or she will need for his or her research. These decisions require that a researcher to decide on a unit of analysis, the group and individuals he or she will study, the procedure for selecting these individuals, and assessing the numbers of people needed for his or her data analysis (Creswell, 2008). This will also include the unit of analysis whereby a researcher will have to identify the supply of information which will answer the research questions. In this research two microfinance institutions, namely, BMT Khalifa and Misykat were the subject of the research.
During data collection process, 15 people were involved in the study. Out of these 15 persons, five were staff members from the two organizations and 10 were the clients involved. However, out of these 10 a few were interviewed and observed on in Individual basis. For instance from Misykat there were only 3 people interviewed and observed on individual basis while from BMT Khalifa only 2 people were interviewed and observed on Individual basis therefore, the remaining 5 were involved in group discussions. (see attachment for the list of members involved).
3.6 Data Collection Techniques
Data collection is the process of gathering and measuring information on variables of interest, in an established systematic fashion that enables a researcher to answer stated research questions, test hypotheses, and evaluate outcomes. The data collection component of research is common to all fields of study. The typical qualitative study involves a number of different data collection strategies and although all options are open, some strategies are used more often than others (Gay, Mills and Airasian, 2006). The data collection techniques I used were observation, both non-directive and unstructured interviews. I also used study of documents and audio visual analysis.
3.6.1 Interviews of the Microfinance Trainers and Trainees
The interview was mainly focused on programs which have integrated education in microfinance for community building and empowerment in BMT Khalifa and Misykat in the city of Bandung. The qualitative research interview seeks to describe the meanings of central them
