Determinants of Bank Selection Choices and Customer Loyalty the Case of Ethiopian Banking Sector

20 Pages Posted: 10 Jun 2017

See all articles by Tesfaye Lelissa

Tesfaye Lelissa

University of South Africa

Lelissa Metasebiya

University of South Africa, Students

Date Written: May 12, 2017

Abstract

Abstract: The study aims to explore the critical bank specific and personal factors that have a bearing on the selection of banks by customers. It has employed an exploratory factor analysis on the 101 questionnaire having 38 component factors. The wide individual items in the questionnaire therefore are simplified and summarized in a gross component. The components are also run in a regression model that links the independent variables that describe bank selection factors with customer loyalty. The result on individual factors four critical factors that determine choice of commercial banks in Ethiopia: the speed of services is among the best in the industry, the extent of the branch network is adequate, the location of branches is appropriate and forex resources are easy to get in the bank. Component wise, the study finds that service quality and availability as well as the quality and accessibility of physical and human resources appear to be the major determinant factor in bank choice. The regression result also shows that the above mentioned factors not only influence customer bank choice but has also impact on their loyalty level.

Keywords: Bank, customer, selection, Ethiopia, choices

JEL Classification: M20

Suggested Citation

Lelissa, Tesfaye and Metasebiya, Lelissa, Determinants of Bank Selection Choices and Customer Loyalty the Case of Ethiopian Banking Sector (May 12, 2017). Available at SSRN: https://ssrn.com/abstract=2967327 or http://dx.doi.org/10.2139/ssrn.2967327

Tesfaye Lelissa (Contact Author)

University of South Africa ( email )

Pretoria
South Africa

Lelissa Metasebiya

University of South Africa, Students ( email )

Pretoria
South Africa

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