CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

This chapter describes the procedures that will be used for conducting the research and it

is presented under the following sub-headings: Research Design; Population of the Study;

Sample and Sampling Techniques; Measurement Variables, Source of Data, Data Collection

Instrument; Method of Data Collection, Method of Data Analysis, and Summary.

3.2 Research Design

For this study, the survey research method was selected as it was deemed appropriate for

describing, analyzing, and interpreting data within the study's target population. Surveys proved

instrumental in delineating the characteristics of a sizable population, offering expansive

capabilities to ensure a more precise sample for gathering targeted results, thereby facilitating

conclusions and informed decisions. Moreover, surveys served as a means to access participants'

thoughts, opinions, and sentiments. By employing the survey research method, it became feasible

to generalize findings from the sample to the broader population.

3.3 Population of the Study

The population under study consisted of small and medium-sized enterprises (SMEs)

situated within the Bauchi metropolis, encompassing a diverse array of industries and sectors,

totaling approximately 300 businesses. These SMEs span various sectors such as retail,

hospitality, healthcare, construction, and information technology services. But the ones

considered in this study are; retail SMEs such as; local boutiques, grocery stores, and specialty

shops, and hospitality SMEs such as; restaurants, cafes, and guesthouses. By including SMEs

from such diverse sectors within the Bauchi metropolis, the study aims to offer a comprehensive

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understanding of the impact of cyber risk on FinTech adoption across various business domains

in the local context.

3.4 Sample and Sampling Technique

For this study, a proportionate random sampling technique was employed to select

respondents from the population of SMEs within Bauchi metropolis. This technique ensures that

the number of respondents selected from each SME category is proportional to its representation

in the population. Questionnaires were then administered randomly to respondents in each SME

category.

A sample size refers to the number of items to be selected from the universe (population

of the study) and it is usually determined through scientific method. Thus, the sample size for the

study was determined using Krejcie & Morgan's (2011) table of sample size. With a population

size of 300 SMEs within Bauchi metropolis, the appropriate sample size was calculated to be 169

respondents. Therefore, 169 staff members from the selected SMEs were contacted as

respondents for this study, ensuring a representative sample for data collection and analysis.

3.5 Measurement of Variables

The measurement variables for this research encompass both dependent (the level of

FinTech adoption among small and medium-sized enterprises (SMEs)) and independent (cyber

risk exposure) factors crucial for assessing the impact of cyber risk on FinTech adoption among

SMEs.

To operationalize these variables, the research will employ quantitative method like

surveys, and financial data analysis. By gathering comprehensive data on FinTech adoption,

cyber risk exposure, and associated outcomes, the study aims to provide insights into the

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complex relationship between cybersecurity and SMEs' adoption of financial technology

solutions.

3.5.1 Dependent Variable

The dependent variable in this study is the level of FinTech adoption among small and

medium-sized enterprises (SMEs). This variable seeks to gauge the extent to which SMEs

integrate FinTech solutions into their business operations. Indicators for measuring FinTech

adoption may include the utilization of digital payment systems, participation in online lending

platforms, and the implementation of automated financial management tools. Understanding the

degree of FinTech adoption is essential for assessing SMEs' readiness to embrace technological

innovations in the financial sector.

3.5.2 Independent Variables

The independent variable under examination is cyber risk exposure. This variable aims to

quantify the level of vulnerability that SMEs face concerning cybersecurity threats. Factors such

as the frequency and severity of cyberattacks, the efficacy of cybersecurity measures

implemented by SMEs, and their overall cybersecurity posture will be assessed. By examining

cyber risk exposure, researchers can ascertain the extent to which SMEs are susceptible to cyber

threats and the potential impact on their adoption of FinTech solutions.

3.6 Sources of Data

Primary data source was used in this study. The primary data was collected through the

use of questionnaire which was administered to the respondents using the personal method. This

means that the questionnaires were administered to the respondents personally by the researcher.

This method was chosen so as to ensure the achievement of a greater response rate through the

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establishment of rapport with the respondents and clarifying areas of doubts in the questionnaire

immediately/on the spot.

3.7 Data Collecting Instruments

The data collection instrument utilized for this research is a structured questionnaire

tailored to the specific objectives of the study. The questionnaire was meticulously designed by

the researcher, incorporating multiple-choice options to enable respondents to indicate their level

of agreement or disagreement on various statements. The questionnaire comprises five distinct

sections, each serving a unique purpose and targeting different aspects of the research topic:

Section A: Demographic Information This section focuses on gathering demographic

data from the respondents, including details such as their institution, age, gender, marital status,

educational background, job designation, department, and years of experience in the SME sector.

Section B: Cyber Risk Exposure This section assesses the level of cyber risk exposure

among SMEs, with specific emphasis on various dimensions such as data security measures,

vulnerability to cyber threats, frequency of cyber incidents, and perceived effectiveness of

cybersecurity protocols.

Section C: FinTech Adoption This section delves into the extent of FinTech adoption

among SMEs, examining factors such as the utilization of digital financial services, integration

of FinTech solutions into business operations, and the perceived benefits and challenges

associated with FinTech adoption.

Section D: Impact of Cyber Risk on FinTech Adoption This section investigates the

relationship between cyber risk exposure and FinTech adoption among SMEs. It explores how

cybersecurity concerns and incidents influence SMEs' willingness and ability to adopt FinTech

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solutions, including their impact on financial losses, reputational damage, and regulatory

compliance.

Section E: Challenges and Barriers In this section, respondents are prompted to identify

and prioritize the key challenges and barriers hindering both cyber risk management and FinTech

adoption within the SME sector. Common challenges addressed include limited resources, lack

of awareness, regulatory constraints, and technological complexities.

The questionnaire design aims to facilitate comprehensive data collection while ensuring

respondents' ease of comprehension and response. It serves as a valuable tool for gathering

empirical insights into the intricate dynamics between cyber risk exposure, FinTech adoption,

and the challenges faced by SMEs in navigating the intersection of cybersecurity and financial

technology.

3.8 Methods of Data Analysis

Data collected for this study was analyzed using Statistical Package for Social Science

(SPSS), 26.0 latest versions. The data collected will be analyzed using descriptive statistics, the

research questions and hypotheses was tested to know the differences or relationship between the

independent variable and dependent variable. The result was attested to the mutual relationship

that existed among the variables (cyber risk exposure and the adoption of fintech among SMEs)

in the study

3.9 Summary

This chapter outlines the method undertaken to investigate the impact of cyber risk on

FinTech adoption among SMEs within the Bauchi metropolis. The survey research method was

selected for its ability to describe, analyze, and interpret data, with surveys serving as a means to

access participants' thoughts and opinions. A proportionate random sampling technique was

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employed to select 169 respondents from various SME categories, ensuring representative

sampling across different sectors. Measurement variables include dependent factors such as

FinTech adoption and independent factors like cyber risk exposure, operationalized through

quantitative methods such as surveys and financial data analysis.

Data collection involved a structured questionnaire comprising five sections, focusing on

demographic information, cyber risk exposure, FinTech adoption, and identifying challenges and

barriers. Analysis utilized the Statistical Package for Social Science (SPSS) 26.0, employing

descriptive statistics to assess differences or relationships between variables. The chapter

highlights a rigorous methodological framework aimed at providing valuable insights into the

intersection of cybersecurity and financial technology adoption among SMEs in the Bauchi

metropolis.