A study of information and communication technology (ICT) adoption by SHG’s in banking activities - Dharwad district

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This article aims to understand the role of technology that can be introduced by banks to ease the lives of many members of the SHG’s in their banking activities. UTAUT Model developed by Venkatesh et.al (2003) has been considered and used to ascertain the users acceptance and adoption of technology in the region of study.

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International Journal of Management (IJM) Volume 7, Issue 6, September–October 2016, pp.145–155, Article ID: IJM_07_06_016 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=6 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication A STUDY OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) ADOPTION BY SHG’S IN BANKING ACTIVITIES - DHARWAD DISTRICT Dr. Vinod N Sambrani Associate Professor, Kousali Institute of Management Studies, Karnatak University, Dharwad, India. ABSTRACT We all understand that, technology has been playing a major part in our daily lives. And ICT has established a vast platform for drastic development. Information exchange and information update is the need of the hour. People need up-to-date information, either for themselves or for their organization, and this need can only be meet with utilizing ICT platform. On the other hand SHG’s have been playing a significant role in micro-finance, especially in rural areas empowering the rural women resulting in better livelihood and lifestyle, where most of the people are illiterates or are with just primary education. These SHG’s are linked with many banking institution for all their savings. This article aims to understand the role of technology that can be introduced by banks to ease the lives of many members of the SHG’s in their banking activities. UTAUT Model developed by Venkatesh et.al (2003) has been considered and used to ascertain the users acceptance and adoption of technology in the region of study. Key words: Information and Communication Technology, UTAUT Model, Self Help groups, Technology Adoption, Technology Acceptance, Rural Banking, Micro-financial Institutions. Cite this Article: Dr. Vinod N Sambrani, A Study of Information and Communication Technology (ICT) Adoption by SHG’s in Banking Activities - Dharwad District. International Journal of Management, 7(6), 2016, pp. 145–155. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=6 1. INTRODUCTION Information Technology (IT) plays a significant role in todays’ world, and financial institutions are the backbone of the any economy. The IT revolution has opened many avenues for Indian Banking sector at present. Almost all the nationalized banks in India are using technology based solutions to overcome the competition and address the needs of the customer in a more befitting manner. The manual operations in traditional banking have drastically been reduced with the use of IT applications, thus creating a centralized environment from distributed environment. This impact of IT in banking sector has revolutionized the process being done with a faster, effective and efficient pace. Bankers are offering customized products and services to their customers using new tools and techniques, which help in understanding the consumer needs. IT impact in this sector is very difficult to be measured. http://www.iaeme.com/IJM/index.asp 145 editor@iaeme.com
Dr. Vinod N Sambrani On the other hand, the Indian rural consumption pattern has changed drastically and is growing at a faster rate, compared to towns and cities, according to a report by credit rating agency CRISIL Ltd. The non- agricultural job opportunities and government initiatives of employment generation schemes have contributed in large for such a growth in terms of raise in house hold incomes. However, technologies for rural communities are being developed by many voluntary organizations. But, the fact remains that these technologies have barely touched the rural population. Rural development is in place and happening in terms of improvement in infrastructures, access to better resources, education, health and hygiene. It is most common to have access to at least one mobile phone in every rural households. A sustaining livelihood in these fast growing villages and cities can only be achieved through a most important driver “Information Exchange”. ICT has been playing a vital role in the development of rural India, increasing its growth in a drastic manner. Technology has largely been playing a dynamic role in our day to day life, need it be a community radio or mobile phone based farmer information services or health related technological solutions. It is clearly evident that, most of this current fast growth is only because of the technology dissemination in small to medium and large scales across India. Opportunities are still abundant to scale and integrate these technologies amongst the rural population, with consistent effort to simplify the processes and finding better ways to make them affordable to improve the lives of people in India. People with common mindsets have all the time come together to either to overcome their difficulties or for betterment of their lives. When compared to such groups, Self-Help Groups (SHGs) have unique characteristics, and different working patterns. In late 1980’s community development discipline was established sharing the concepts of empowerment. In a couple of decades the concept of SHGs have deep rooted drastically in India. In most cases, the people in SHGs are the ones who are most affected by a specific issue, who come together and support each other to overcome such issues affecting their lives. Activities that groups do include community education, information sharing, mutual support etc. Definition: Self-Help Group “Self Help group (SHG) is a self-governed, peer-controlled small and informal association of the poor, usually from socio-economically homogeneous families who are organized around savings and credit activities.” Most of the funding for such activities comes from the group members regular saving deposited on weekly basis. During their interactions/ meetings they discuss on common issues and plan to overcome them with solutions through consultation. They also share vital information across the group and make diligent efforts to improve their literacy as well as health. SHG’s are not charity or simply community based groups. Although the work is usually unpaid, members work to change their own economic and financial conditions and the support is mutual. The knowledge base of self-help mutual support groups is experiential, indigenous, and rooted in the wisdom that comes from struggling with problems in concrete, shared ways. 2. LITERATURE REVIEW Most of the SHGs are linked with NGO’s active in their respective areas for assistance of any kind or dependent on the co-operative banks or societies or micro-financial institutions for their financial aids. SHGs have another very important role to play particularly in the transfer of technology to user group population. Until mid-1960’s, the Co-operative banking sector was entrusted the responsibility of fulfilling the credit needs of the rural people in India. With the advancement in technology, commercial banks started to penetrate by expanding their branches and direct lending in the rural areas, especially for the agricultural sector. The massive branch proliferation of nationalized banks helped the people in farthest areas to have access to financial services. According to Bell, 1990 the growth and extension of rural credit banished village financiers to a substantial extent and led to modest increases in comprehensive crop output, strident increase in the use of fertilizers/ pesticides and in investments in tangible assets like tractors, pump sets and animal http://www.iaeme.com/IJM/index.asp 146 editor@iaeme.com
A Study of Information and Communication Technology (ICT) Adoption by SHG’s in Banking Activities - Dharwad District stocks. Binswanger and Khandker, 1992 noted that, a substantial positive effect is seen in non-farm employment. The Information Technology (IT) saga in Indian Banking sector commenced from the mid-eighties when the Reserve Bank of India (RBI) took upon itself the task of promoting computerisation in banking to improve customer services, book keeping, Management Information System (MIS) to enhance productivity. RBI has played the guiding role which helped banks in achieving various objectives such as the introduction of MICR based cheque processing, Implementation of the electronic payment system such as RTGS (Real Time Gross Settlement), Electronic Clearing Service (ECS), Electronic Funds Transfer (NEFT), Cheque Truncation System (CTS), Mobile Banking System etc. The Payment and Settlement Systems Act, 2007 (effective from August 12, 2008) designates the RBI as the authority for regulation and supervision of payment systems in India. Electronic Banking as referred by Suoranta & Mattila (2004); Laforet & Li (2005); Laukkanen (2007); Sripalawat et al. (2011) are all related to the use of Internet Banking and Mobile Banking. As we understand, both internet banking and mobile banking are two different aspects for banks to deliver their services. Scornavacca & Hoehle (2007) also refer in their article that, customers also acquire these services for all their banking activities. Riquelme & Rios (2010) state that, customers in order to use Internet Banking are required use this service through computers connected to Internet, whereas for mobile banking, they are using through wireless devices. Suoranta & Mattila (2004), and Singh et.al, (2010) found that, time-critical customers preferred mobility as their first choice with the use of mobile banking. Koenig-Lewis et al. (2010) also found that, online banking was the only cheapest mode of delivering banking services. Despite of having many studies been carried out with respect to technology usage in banking sector. And relevant developments and advancements have already taken place. Still there is a lot need to study and improvise with the current scenarios. 3. OBJECTIVES OF THE STUDY • To ascertain the technology adoption by the members of SHG’s. • To know and understand the need of technology by SHG members in banking activities. • To understand the Bank roles in disseminating ICT initiatives to the SHG’s. 4. RESEARCH METHODOLOGY The study conducted is quite exploratory in nature, because no known hypothesis was developed. Hence the objective called for an exploratory research instead of a conclusive one. The information needed were not available from secondary sources hence involves primary data collection. Primary data was collected after using structured questionnaire developed in reference with the UTAUT model mentioned below. Sampling Technique: Random Sampling Sampling Unit: Member or Leader of SHG’s Sample Size: 150 SHG’s Population of Study: SHG’s in Dharwad District 4.1. Model Used After analysing various other literature on technology acceptance, the use of Unified Theory of acceptance and Use of technology (UTAUT) model is found to be suitable for the said study. http://www.iaeme.com/IJM/index.asp 147 editor@iaeme.com
Dr. Vinod N Sambrani The model is as follows: Figure 1 Source: Venkatesh et.al., (2003) 5. FINDINGS A pilot study using the earlier questionnaire was done to validate the investigation mechanism. Feedback about the layout of the questionnaire and question ambiguity was obtained. Relevant changes were done to the questionnaires as considered suitable. The revised questionnaires were circulated across all the talukas and villages in the district. The data collected using the questionnaire was tabulated, analyzed and presented in tables and descriptions. The demographic profile of respondents were also collected. Table 1 exhibits the sample characteristics, usage and awareness. 5.1. Demographic Profile of the Respondents Items/Parameters Frequency Percentage Gender Male 11 7.3 Female 139 92.7 Age Group 18-23 9 6.0 24-28 11 7.3 29-34 59 39.3 Above 35 71 47.3 Education Level Primary 56 37.3 Secondary 52 34.7 http://www.iaeme.com/IJM/index.asp 148 editor@iaeme.com
A Study of Information and Communication Technology (ICT) Adoption by SHG’s in Banking Activities - Dharwad District Technical or Vocational 5 3.3 University 20 13.3 No formal Education 17 11.3 Duration of Bank operations 1 Year 7 4.7 2 Years 16 10.7 Above 2 Years 127 84.7 Frequency of ICT Enabled Banking Services usage Never 119 79.3 Once in a week 4 2.7 Once a month 24 16.0 Many times in a month 3 2.0 ICT enabled Banking services awareness No Awareness 119 79.3 Mobile Banking and ATM 1 .7 Mobile Banking and SmartPhone App 4 2.7 Internet Banking 2 1.3 ATM/ E-Kiosk 24 16.0 Table 1 Demographic Profile of Respondents Table 1 exhibits that, 92.7% of the respondents were females, as compared to males. This is quite obvious because, most of the established SHG’s are created to empower women in these areas. Very few male SHGs are active and functional. 47.3% of the respondents are above 35 in age, and either leader(s) or second leader(s) member in the groups. 88.7% of the respondents are literates with at least primary schooling (37.3%). About 84.7% of the respondents are directly involved in banking transactions. 6. ASSESSMENT OF VALIDITY Construct power is a concern of seriousness between the constructs. For the current research, 19 different items are selected, classified into five different constructs in the UTAUT model. The renamed abbreviation and descriptive figures of each construct and item are presented in Table 2: http://www.iaeme.com/IJM/index.asp 149 editor@iaeme.com
Dr. Vinod N Sambrani Standard Scales/ Items Mean Deviation Performance Expectance[PE] (In conducting banking affairs, ) 3.86 .535 (PE1) using ICT enabled banking would improve my performance 3.80 .724 (PE2)using ICT enabled banking would save my time 4.03 .639 (PE3) I would use ICT enabled banking anyplace 3.79 .799 (PE4) I would find ICT enabled banking useful 3.83 .680 Effort Expectance [EE] 3.46 .634 (EE1)Learning to use ICT enabled banking is easy for me 3.80 .705 (EE2)Becoming skillful at using ICT enabled banking is easy for me 3.35 .852 (EE3)Interaction with ICT enabled banking is easy for me 3.41 .812 (EE4)I would find ICT enabled banking is easy to use 3.27 .730 Social Influence [SI] 3.53 .702 (SI1)People who are important to me think that I should use ICT enabled 3.61 .767 banking (SI2)People who are familiar with me think that I should use ICT enabled 3.49 .766 banking (SI3)People who influence my behavior think that I should use ICT enabled 3.47 .757 banking (SI4)Most people surrounding with me use ICT enabled banking 3.52 .783 Facilitating Conditions [FC] 3.50 .602 (FC1) My living environment supports me to use ICT enabled banking 3.67 .700 (FC2) My working environment supports me to use ICT enabled banking 3.53 .720 (FC3) Using ICT enabled banking is compatible with my life 3.93 .778 (FC4) Help is available when I get problem in using ICT enabled banking 2.87 .900 Behavioural Intention [BI] (When dealing with banking affairs) 4.03 .619 (BI1)I prefer to using ICT enabled banking 3.95 .698 (BI2)I intend to use ICT enabled banking 4.11 .697 (BI3)I would use ICT enabled banking 4.03 .685 Table 2 Respondent Data Descriptive Statistics http://www.iaeme.com/IJM/index.asp 150 editor@iaeme.com
A Study of Information and Communication Technology (ICT) Adoption by SHG’s in Banking Activities - Dharwad District As defined by Wikipedia (Standard Deviation, 2016)“the standard deviation is a measure that is used to quantify the amount of variation or dispersion of a set of data values. A low standard deviation indicates that the data points tend to be close to the mean (also called the expected value) of the set, while a high standard deviation indicates that the data points are spread out over a wider range of values. In addition to expressing the variability of a population, the standard deviation is commonly used to measure confidence in statistical conclusions.” Table 2, clearly exhibits that, the scale items are not much deviated from its mean values. Except for FC4 which is 0.9 and is on a higher side compared to all the other items. Almost all the items standard deviation is below 1 and hence, it can be concluded that the data set for all the items are not much deviated from their mean scores. Correlations PE4 EE3 EE4 SI2 SI3 SI4 FC1 FC2 FC3 FC4 BI1 BI2 BI3 PE2 .662 EE1 .530 EE2 .703 .635 EE3 .620 EE4 .513 .532 SI1 .692 .815 .762 .438 .534 SI2 .752 .855 .517 SI3 .804 .543 SI4 .564 FC1 .654 .572 .504 FC2 .537 BI1 .659 .704 BI2 .726 Table 3 Correlations of construct items Correlations amongst the construct items was carried out to have a better understanding of the linkages. Table 3 exhibits that, 13 items are correlated with each other. Other items which are not listed above are correlated but only the ones above 0.5 are considered for significant positive correlations. SI2 and SI4 are with a correlation score of 0.855, exhibits that these scale items are positively and highly correlated with each other, SI2 is also having a remarkable correlation with SI3. Similarly, SI3 is significantly correlated with SI4, SI2 and SI1. EE2 and EE3 are also highly correlated with a significant value of 0.703. http://www.iaeme.com/IJM/index.asp 151 editor@iaeme.com
Dr. Vinod N Sambrani Rotated Component Matrixa Constructs Items Component 1 2 3 4 5 Behavioral Intention (BI) BI1 .781 BI2 .837 BI3 .877 Performance Expectancy (PE) PE1 .630 PE2 .869 PE4 .856 Effort Expectancy (EE) EE2 .846 EE3 .896 EE4 .754 Social Influence (SI) SI1 .840 SI2 .844 SI3 .856 SI4 .869 Facilitating Conditions (FC) FC1 .814 FC2 .657 FC3 .745 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 6 iterations. Table 4 Rotated Component Matrix of Item under each constructs Factor Analysis with VARIMAX Rotation Note: Only Item loadings above 0.5 on their theoretically associated factor are considered. The factor loading for scale items based on VARIMAX rotation is shown in Table 4. After performing factor analysis on individual constructs, few scale items like PE3, EE1 & FC4 falling below 0.5 factor loading were dropped to attain a significant ideal loading across the item and components. Remaining scale items are more ideal in their respective components. Thus, this analysis confirms the validity for the use of UTAUT Model which proved a strong correlation for many scale items in the constructs. 7. ASSESSMENT OF RELIABILITY As with the general understanding, (Introduction to SAS., 2016) “Cronbach's alpha is a measure of internal consistency, that is, how closely related a set of items are as a group. It is considered to be a measure of scale reliability. Exploratory factor analysis is one method of checking dimensionality. Technically speaking, Cronbach's alpha is not a statistical test - it is a coefficient of reliability (or consistency).” http://www.iaeme.com/IJM/index.asp 152 editor@iaeme.com
A Study of Information and Communication Technology (ICT) Adoption by SHG’s in Banking Activities - Dharwad District Construct validity remains a vital measurement tool between the constructs, while reliability is measured within the constructs. In this study, the reliability of data is analyzed using Cronbach’s Alpha technique. Table 5 & 6 clearly states a very high level of reliability coefficient. According to Venkatesh et al.(2003) a reliability coefficient of 0.7 or above is normally considered acceptable. Which confirms the status of internal consistency amongst the constructs. Thus, the results confirm the reliability analysis of constructs from the above model. Constructs Cronbach's Alpha PE 0.742 EE 0.832 SI 0.934 FC 0.777 BI 0.873 Table 5 Inter-Factor reliability using Cronbach's Aplha for each construct Reliability Statistics for all items together Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items .908 .909 19 Table 6 Factor reliability using Cronbach's Alpha technique for all constructs together Inter-Item Correlation Matrix Performance Effort Social Facilitating Behavioural Expectancy Expectancy Influence Conditions Intention Performance 1.000 .342 .426 .530 .388 Expectancy Effort .342 1.000 .414 .430 .207 Expectancy Social .426 .414 1.000 .568 .465 Influence Facilitating .530 .430 .568 1.000 .582 Conditions Behavioural .388 .207 .465 .582 1.000 Intention Table 7 Inter Item Correlation Matrix To add up, the inter-item correlation matrix between the constructs is reflected in Table 7, which exhibits a self-determining relationship between variables. Correlation as explained above shows the linkage between each constructs. In the above table 7, the inter-item correlation matrix, the values 1.0 shows that these constructs are highly independent and the lesser value (for e.g, 0.207 for Effort expectancy and Behavioral Intention) determines that these items are not much dependent on each other. Independency of each construct is clearly visible. And the results of this matrix supports more evidence in proving the reliability of UTAUT scale items considered for the study. http://www.iaeme.com/IJM/index.asp 153 editor@iaeme.com
Dr. Vinod N Sambrani 8. CONCLUSION ICT has a very significant role to play for faster, smoother and efficient development through information exchange. And, the usage of ICT by SHG’s is barely available, despite some efforts by a few supporting NGO’s active in the areas of study. UTAUT Model was considered to be suitable to have an overall understanding of the current scenario. Many other different models were available, but only the UTAUT model gave consideration to assess the usage of ICT by SHG’s. Study reveals that, no proper ICT mechanism exists between the SHG’s and banks/ Micro-financial institutions operating in this region. On the other hand, from the data collected, it clearly specifies that, members of SHG’s do have the intention of learning and adopting the technology, which are currently only being used by urbanites. Bankers and MFI’s have been trying hard to bring in technological changes, especially to assist the SHG’s in rural areas. A proper technological mechanism is a must need to meet out the requirements of the SHG’s. Financial Institutions have a very significant role to play, as they are the key to create awareness and bring in technology to its users. Hence, they are required to conduct camps to train these SHG users to use and operate their banking activities using technology. The main insights of using the UTAUT model to meet the objectives of the study are as follows. Firstly, the factor analysis proved the validity of acceptable constructs used, despite some variables and scale items were dropped. Secondly, each scale items have obtained a very high level of Cronbach’s Alpha reliability. The inter-item correlation matrix and degree of correlation between items have showed a positive result for the usage of the UTAUT Model in the study. In conclusion, it is suggestive that, banks must involve in bringing technology to every SHG’s and its members, thus improvising and reducing the efforts of all the individuals concerned. And this is possible, through simplification of technology and timely training to all the SHG members. As SHG’s are playing a vital role in handling micro-finances, importance must be given to ease their banking needs and that is only possible through the use of technology. ACKNOWLEDGEMENT The authors acknowledge the generous financial support extended by Canara Bank Chair to undertake the research study. REFERENCE [1] Aruna, M., & Jyothirmayi, M. R. (2011). The role of microfinance in women empowerment: A study on the SHG bank linkage program in Hyderabad (Andhra Pradesh). Indian Journal of Commerce & Management Studies ISSN, 2229, 5674. [2] Dr.AnilkumarK.H, S. G. (June 2013). Financing of Self-Help Groups by Co-operative banks in Karnataka. Asia Pacfic Journal Of Research . [3] Bell, C. (1990). Interactions between institutional and informal credit agencies in rural India. The World Bank Economic Review, 4(3), 297-327. [4] Binswanger, H. P., & Khandker, S. R. (1995). The impact of formal finance on the rural economy of India. The Journal of Development Studies, 32(2), 234-262. [5] Introduction to SAS. (2016, Sept 14). Retrieved from UCLA: Statistical Consulting Group: http://www.ats.ucla.edu/stat/spss/faq/alpha.html [6] Mr. Sanjay Kumar Panda, Prof. D.P.Mishra, Prof. S.Pattanaik, E-Business and its Effectiveness on Banking System with Special Reference to Gramya Bank. International Journal of Management (IJM), 2(2), 2011, pp.51-55. http://www.iaeme.com/IJM/index.asp 154 editor@iaeme.com
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