Assessment of factors affecting customer satisfaction at Bank of

Abyssinia Negussahilesilassie branch Debre Birhan town

A Thesis Submitted to the School of Graduate Studies of Rada

University college in Partial Fulfillment of the Requirements
for the Award of the Degree of Management
By

1. BIZUNESH ABEBE TASSEW

2. MERON
3. BIZUAYEHU TOFIE
4. ALMAZ ADMA
 By

Rada University college Business and Economics College,

Management program

April ,7 , 2025

Debre birhan , Ethiopia

 Assessment of factors affecting customer satisfaction at bank of
Abyssinia Negussahilesilassie branch (private) Debre
Birhan town

By
1. BIZUNESH ABEBE TASSEW
2. MERON
3. BIZUAYEHU TOFIE
4. ALMAZ ADMASU

II
 Acknowledgement

First of all we would like to thank deeply to my advisor, Mr. Tefera, for his precious comments,
guidance and unreserved support in checking and giving constructive suggestions. We
appreciation also goes to Business manager of the bank Ato Belete Belachew for his
collaboration and support in our study.

III
 TABLE OF CONTENT

CERTIFICATE I
DECLARATION II
ACKNOWLEDGEMENT III
TABLE OF CONTENT IV
ABBREVIATIONS AND ACRONYMS V

LIST OF TABLE VI

TABLE OF FIGURE VI

ABSTRACT VIII

CHAPTER ONE
1. INTRODUCTION 1

1.1 Back ground 1

1.2 Statement of the problem 4
1.3 Research question 5

1.4 Objective--------------------------------------------------------------------------------------------5

1.5 Significance of the study 6

1.6 Scope of the study 6

1.7 Organization of the study 6

CHAPTER TWO
2. LITERATURE REVIEW 7

2.1 Theoretical Literature 7

2.2 Empirical Literature 13

2.3 Conceptual frame work 16

CHAPTER THREE
3. METHODOLOGY
3.1 Research design & approach 17
 3.2 Target population & Sampling design----------------------------------------------------------17

3.3 Data type and source 18

3.4 Method of data collection 18

3.5 Validity and Reliability 19

3.6 Method of data analysis 19

3.7 Model specification 20

3.8 Ethical consideration 20

CHAPTER FOUR
RESULT AND DISCUSSION 21

4.1. Introduction 21

4.2 Response rate of respondents 21

4.3 Demographic profile of respondents 22

4.4 Reliability analysis 23

4.5 Service quality in BOA S.C bank 23

4.6 The level of satisfaction on ICT 27

4.7 The level of satisfaction on price fairness----------------------------------------------------28

4.8 level of Customer satisfaction in BOA S.C--------------------------------------------------29

4.9 Association between factors & customer satisfaction---------------------------------------30

4.9.1 Pearson correlation analysis 31

4.10 Factors affect customer satisfaction 32

4.10.1 Regression analysis 32

4.11 Discussion 34

CHAPTER FIVE
Conclusion and Recommendation - 36

5.1 Conclusion 36

5.2 Recommendation 37
REFERENCE 41

Appendixes---------------------------------------------------------------------------------------------------- 44

IV
ABBRIVATION AND ACRONYM

ATM Automatic teller machine

CBO Corporate Bank of Oromia

CBE Commercial Bank of Ethiopia

CI Confidence Interval

CS Customer Satisfaction

Ha Alternate Hypothesis

Ho Null Hypothesis

ICT Information and Communication Technology

IT Information Technology

BOA Bank of abyssinia

POS Point Of Sale

SC Share Company
SD Standard Deviation

V
 LIST OF TABLES

Table 4.2.1 Rate of Responses by Respondents

Table 4.3.1 Customer profile (demographic

data) Table 4.4.1 level of customer satisfaction in

BOA
Table 4.4.2 Customer level of satisfaction Reliability
Table 4.4.3 Customer level of satisfaction Tangibility
Table 4.4.4 Customer level of satisfaction Responsiveness
Table 4.4.5 Customer level of satisfaction Assurance
Table 4.4.5 Customer level of satisfaction Empathy
Table 4.4.6 Customer level of satisfaction on ICT

Table 4.4.7 Customer level of satisfaction on Price fairness

Table 4.5.1 Respondents customer satisfaction
Table 4.5.2 Summary of satisfaction level

LIST OF FIGURE

Figure 4.2.1 Conceptual frame work

VI
 ABSTRACT

This research aimed at examining factors that affect customer satisfaction at Bank of abyssinia
S.C. Negussahilesilassie Branch Debre Birhan town. The population of the study constituted all
the customers of BOA Negussahilesilassie Branch and a sample of 124 customers conveniently
selected from this bank. The design of the study was descriptive and qualitative type of research
conducted .The data collection tool used self-administered questionnaire and scheduled type
filled by customers of BOA bank and interviews were made with the management person. The
study findings revealed that greater numbers of customers of BOA were not satisfied by
services/products. The finding also shows that association between overall customer
satisfactions with factors such as service quality, ICT related factor and price related factor.
However, the study results have not shown the existence of association between overall customer
satisfaction and Responsiveness.. Moreover the findings revealed that factors such as services
like reliability, tangibility and information technology were the major impact of customer
satisfaction in Bank of abyssinia of Debre Birhan town Negussahilesilasie branch.

Key words: Customer satisfaction, factors of customer satisfaction, service quality, ICT.

VII
 CHAPTER ONE
1. INTRODUCTION

1.1 Background of the study

It is a well-known fact that no business can exist without customers. So they must be satisfied.
More than any other, banking industry is a customer oriented services industry. Customer
satisfaction is the key factor for customer retention and thereby the banks success. So identifying
and improving the factors that can limit the satisfaction of customer is the crucial step for the bank
which wants to be a step forward than its competitors.

As suggested by Berry (1990) and Kumbhar (2011) customer satisfaction is an ambiguous and
applied concept and the actual manifestation of the state of satisfaction will vary from person to
person and product/service to product/service. The state of satisfaction depends on a number of
both psychological and physical variables which correlate with satisfaction behaviors such as return
and recommend rate. The level of satisfaction can also vary depending on other options the
customer may have and other products against which the customer can compare the organization's
products. Among several factors; Quality, Economic factor, Timeliness, Efficiency, Ease of Access,
Organizational environment, Commitment to the Customer and Innovation, Behavior of employees,
Willingness to solve problems, friendliness, knowledge level, communication skills etc. are some
major factors that affect the satisfaction of customer. These factors are used for measurement and
continuous improvement of customer satisfaction.

Service quality and customer satisfaction are very important concepts that companies must
understand if they want to remain competitive and grow. In today‟s competitive environment
delivering high quality service is the key for a sustainable competitive advantage (Angelova and
Zekiri, 2011). More companies are recognizing the importance of satisfying and retaining
customers; many businesses such as banks, insurance companies, and other service providers
realize the importance of quality customer service and its potential to help them acquire new
customers, retain existing ones and maximize their lifetime value (Onut, et al., 2011). Banks that
master service quality can gain a competitive edge in terms of higher revenue, customer loyalty and
customer retention (Kumar et al., 2010).

1
In Africa, it is perceived that the bank customer of late is more knowledgeable, demanding,
analytical and aware of his rights and as such would not like to be treated anyhow or given
substandard service (Asante and Kwasi, 2012). For instance, in the banking industry in Ghana; the
intense competition in the past years due to new entrants into the industry both local and foreign
and enforcement of Bank of Ghana regulations has demanded the need to offer high service quality
to differentiate offerings in the market place. This is in a bid to attract and retain customers and
increase customer confidence (Amoako, 2012). According to (Moller, 2008) customers of retail
banks in Africa are clearly seeking a responsive service, with a high level of staff efficiency. This
would suggest that efforts to increase speed of processing information and customers are likely to
have an important and positive effect on customer satisfaction. Addressing this issue through
regular staff training should improve service quality. Shorter queues, service reliability and
convenient locations are also considered to be very important by customers. For retail banks in
Africa wanting to enhance customer satisfaction, these would be key areas for improvement.

Modern banking in Ethiopia began in 1905 with the Bank of Abyssinia, a private company
controlled by the Bank of Egypt. In 1931 it was liquidated and replaced by the Bank of Ethiopia.
Which was the bank of issue until the Italian invasion of 1936? During the Italian occupation, Bank
of Italy banknotes formed the legal tender. Under the subsequent British occupation, Ethiopia was
briefly a part of the East Africa Currency Board. In 1943, the State Bank of Ethiopia was
established, with 2 departments performing the separate functions of an issuing bank and a
commercial bank. In 1963, these functions were formally separated and the National Bank of
Ethiopia (the central and issuing bank) and the Commercial Bank of Ethiopia were formed. In the
period to 1974, several other financial institutions emerged including the state owned: The Saving
and Mortgage Corporation of Ethiopia and the imperial saving and Home Ownership Public
Association (Which provided saving and loan services).

The shift to Marxist government in 1975 brought several changes to the banking system, and saw
the nationalization of private banks and insurance companies. The major 3 Commercial Banks were
merged under the Addis Ababa Bank, and the National Bank of Ethiopia was given oversight over
all financial institutions. The new Housing and Saving Bank provided loans for new home
construction and home improvements. The Current Conditions of financial system of Ethiopia is
very underdeveloped. There is not stock exchange and of the nineteen banks that exist. There are no
foreign banks in the country, and the system remains isolated from the effects of globalization while
policy makers fear that liberalization will lead to loss of control over the economy. The government
2
controls interest rates and sets them below the high inflation rate. Corruption, though strictly
sanctioned, remains a concern. Currently there are about sixteen private commercial banks and
three public banks a total of nineteen banks in Ethiopia.

Since its establishment in 1999, Bank of abyssinia S.C has becomes one of the strongest banks in
the banking industry of Ethiopia. It has experienced tremendous growth since the bank start its
operation. Bank of abyssinia S.C coined its name from the Bee which is hard worker. Bank of
abyssinia S.C vision, to become an icon of excellence and the leading commercial bank in Ethiopia.
The mission of the Bank to provide customer focused, efficient and effective full-fledged
commercial banking services by deploying qualified, honest and motivated staff, state-of-the-art
technology and thereby optimize stakeholders‟ interest to satisfy its customer need. It operates
through a network of 185 Branches, five dedicated Forex Bureaus, Automatic teller machine
(ATMs) and plus Point-of-Sale (POS) terminals spread across the length and breadth of the nation.
The bank is the most reputable brand in the domestic banking market; a reputation earned through
consistent delivery of values and preeminence by its competitors. The Bank also works in
partnership with leading brands in the prominent money transfer operators (Western Union, Money
Gram, Express Money, Golden money, Dahabshiil & Trans Fast.)It operates through its Head office
in Addis Ababa and 105 branches and 3 agency offices for foreign exchange transactions in and
outside Addis Ababa. Therefore this study assessed factors that affect customer satisfaction in Bank
of abyssinia S.C Negussahilesilassie branch.

1.2 Statement of the Problem

Customers have expectations and criteria when they judge whether the provided banking services is
satisfactory or not. At the same time, due to the high competition in a banking sector, the perception
of customers and potential customers are also divided according to the services that they want to
achieve. The proper identification of customer satisfaction helps to retain customers and to increase
profitability and effectiveness of bank‟s services. Customer satisfaction on banking services of
bankof Abyssinia in Negussahilesilassie branch , the study revealed that there are a number of
problems hindering the smooth delivery of the banking services. The waiting time of customers is
more bulky, which enhance the plan of time management is failed, the network problem, for
instance is the major obstacle in the check clearing operations. Besides, in the loan operations and
the delays of
3
the loan approval are the major problems. In the electronic banking services, the benefits they
obtained are limited (Belay and Ebisa, 2012).

However, variables such as duration of using banking services do have negative significant
influence on the CBO customers‟ satisfaction. Whereas, variables such as age, education, duration
of using banking services and image were found to have significant positive influence on customer
satisfaction towards banking services in the case of OIB. It is beyond the expectation that not all
other institutional variables have significant influence on the OIB customers‟ satisfaction excepting
service that to shows negative significant influence (Karunakaran, 2015).

In today‟s fast changing world, banking environment has become highly competitive and banks are
required to respond quickly to the dynamics of fast changing customer‟s expectations. To be able to
survive and exceed in this changing market, banks are striving to improve their customer service
quality and productivity through adaptation of electronic banking. Electronic banking is generally
an extension of traditional banking, using the internet as an electric delivery channel for banking
products and services. The banking today is redefined and re-engineered with the use of IT and
banks start offering more sophisticated services to customers with continuous product and process
innovation (Tiwari and Kumar, 2012). Today‟s dynamic and stiff market competition forced banks
to spend all their resources on improvement of service quality and value added activities in order to
survive and become productive. Yeboah et al, (2013) believes that total automation of banking is an
imperative need for all banks to attract more customers, provide efficient and quality services, and
survive in the emerging new competition, apart from the profit motive which is the primary
objective of the banks.

One of the research questions in this study is to know whether the customers are satisfied or not in
the services of Bank of abyssinia of Negussahilesilassie branch (Menaheriya site), and to know the
most significant variables that govern customer satisfaction in the study area.

In general for the banks the challenges were service quality: responsiveness, partially tangibility
and the loan service and its interest. These are the major customer oriented opportunities and
challenges for the banking sector in Negussahilesilassie banks. So, this study fill the gaps between
ServQual model and the actual service they have received and also examine service quality,
interests of the
4
savings, internet and mobile banking and analyzing the level of satisfaction at Bank of abyssinia
Negussahilesilassie branch ,

1.3 Research question

 What looks like the service quality in customer satisfaction of Bank of abyssinia
Negussahilesilassie Branch?
 What is the level of customer satisfaction of services in Bank of abyssinia
Negussahilesilassie Branch?
 What is the effect of Information Technology on customer satisfaction in Bank of
abyssinia Negussahilesilassie Branch?
 What looks like charge of price effect on customer satisfaction Bank of abyssinia
Negussahilesilassie Branch?

1.4. Objective of the Study

1.4.1. General objectives:
 The main objective of this study was to examine the factors affecting customer satisfaction
at Bank of abyssinia Negussahilesilassie Branch?

1.4.2 Specific objective:

The study has got the following specific objectives:
 To examine the level of satisfaction of services at Bank of abyssinia Negussahilesilassie Branch.
 To examine the effect of service quality on customer satisfaction in Bank of abyssinia
Negussahilesilassie Branch.
 To examine information communication technology on customer satisfaction of
Bank of abyssinia S.C Negussahilesilassie branch.
 To investigate charge of price for services or products that has effect on
customer satisfaction at Bank of abyssinia Negussahilesilassie Branch

1.5 Significance of the study

The private banks utilize the findings of this study on factors that influence customer satisfaction as
a basis for formulating customer engagement and satisfaction strategies in order to alleviate the
problem of satisfaction. For Managers of private banks this research offers information on groups
of factors leading to high levels of customer satisfaction. They can use the information in allocating

5
recourses (where should be improved) and making better informed decisions on which factors to
develop. They can only serve as one aspect in enhancing the understanding of the factors related to
customer satisfaction. The private banks can adopt a recommendation that was made by the study
so as to enhance customer satisfaction in their product and services at the bank.

Moreover, this study is significant to researchers and academicians in that it adds value to the body
of literature on factors that influence customer satisfaction in the banking sector. Researchers can
use the findings of this study: as their reference and guide for their study, to formulate hypothesis,
confirm findings or conduct further study on the same. Academicians also can use these study
findings to test their hypothesis, to utilize the study findings for empirical literature review for
further studies, to boost the knowledge base and enhance further research operation in the future in
relation to customer satisfaction . Customer satisfaction especially in the banking industry needs to
be researched on and this study offers a base for further development of the field.

The results of the study provide information for concerned organizations in setting and developing
policies and strategies to improve customer satisfaction and to protect and enhance customer
experiences with banking so as to retain and attract new customers. Finally, this study Will boost to
knowledge and skills in analyzing and interpreting the gathered data during the study. It also helps
me to identify and prioritize the factors that affect customer satisfaction at BOA S.C bank.

1.6 Scope of the Study

This study focused on factors influencing customer satisfaction at private banking industry, and
measures customers overall level of satisfaction. It was used self-administered questionnaires and
interview questionnaires. The scope of the survey is limited to studying customer satisfaction in
Bank of abyssinia S.C Negussahilesilassie branch.

1.7 Organization of the study

This study has five chapters. The first Chapter deals with the background of the study, statement of
the problem, objectives of the study, scope, and significance of the study. While, Chapter two deals
with literature review and Chapter three deals with the methodology which covers research design,
sampling design, data type and source method of data collection, method of data analysis, validity
and reliability and ethical consideration. Chapter four presents the result and discussions of the
analyzed data. Chapter five discusses about conclusion and recommendation.
6
 CHAPTER TWO
LITERATURE REVIEW

2.1. Theoretical Literature

Definition
The main purpose of any business is to create customer satisfaction. In a highly competitive and
nearly identical products economy, offering differentiating services and building long-term
relationships with customers can be critical for banks success. The competitive power, strength, and
survival of a bank lie in the degree of its customer satisfaction (Jayaraman et al, (2010). Banks must
therefore, recognize and give earnest attention to the satisfaction of customers in planning their
success, as customers could shake the whole interest of the business they are linked.

Customer Satisfaction: Hoq and Amin (2010) defines customer satisfaction as the general
evaluation based on business actions carried out by organization in relation to customer
expectations that has been accumulated over a period of times as a result of the client using the
organizations products or services. Narteh and Kuada, (2014) on the other hand define customer
satisfaction as the utility derived from using a services based on initial expectation of the service.
According Chavan and Ahmad, (2013) Customer satisfaction can be defined as the company‟s
ability to fulfill business, emotional, and psychological needs of its customers. In other word it is a
summary of psychological state resulting when the emotion surrounding disconfirmed expectations
is coupled with the consumer prior feeling about the consumption experience.
However Kumbhar (2011) argued that a customer satisfaction is an ambiguous and abstract
concept. He continued that, actual manifestation of the state of satisfaction will vary from person to
person, product to product and service to service. It is well-researched fact that there is a strong
linkage between customer satisfaction and operational performance.

Service Quality: Service quality is defined is a component of business that organizations use to
establish the interaction and engagements between themselves and their customers. In this case, the
organizations offer a service through a medium or channel, and a customer finds value in the
service that has been, or is being offered (Wruuck, 2013).

7
If poor customer service is realized at any time in a business, it will lead to customer
dissatisfaction. If more customers are retained at an increased rate, a business can be able to
realize profits increased by 25% on an average scale (Griffin, 1995). Tangibility, Reliability,
Responsiveness, Assurance and Empathy are used to measure the gap between customers'
expected service level and perceived service level by performing the gap analysis
(Parasuraman et al., 1985). Buell et al. (2010), in the retail banking industry in the U.S, the
industry is found to be too competitive and customized in offering a better service quality
and price to the customers and hence there is a positive association between customer value
and service sensitivity when the competitor lacks in providing high quality services to the
customers.

All the five dimensions of service quality had influenced customer satisfaction
substantially and improving the service quality elements is widely considered as the main
ancestor which could effectively bring significant contributions on customer satisfaction.
Sudhahar and Selvam (2007) studied about service quality scale development in retail
banking sector in India by measuring thirty four determinants with the help of scaling
procedure. The availability of service operations in banks and employees performance are
closely related to each other which directly influence customer perception towards the bank.
Customer satisfaction in today's marketing era is believed to strongly connect with
understanding consumer behavior. To understand the consumer buying pattern as firms are
looking to influence them, each organization seeks help from external agencies and various
sources to acquire the required information via the very common consumer behavior
research analysis. Ultimately, there are certain motivating and influencing factors which
play important role in convincing a customer to choose a product and the same factors are
also responsible for the consumer satisfaction after the post purchase behavior.

Consumers prefer products not base on the functional features anymore; rather products are
preferred by them based on the environmental impacts and some other dynamic factors
(Mont and Plepys, 2003). Also, one of the extremes, customer satisfaction is always
intended to influence buyers' repurchase intention through positive word of mouth
interaction; meanwhile being the other extreme, dissatisfaction leads to negative word of
mouth communication. Moreover, satisfied customers always suggest others to go for the
product while dissatisfied customers will also recommend others in huge numbers but in the
8
context of negative marketing, most probably dissatisfied customers recommend others not
to use the product (La Barbera and Mazursky, 1983).Product differentiation is impossible in a
competitive environment of the banking industry.

According to Qureshi et al. (2013) customer satisfaction has strong influence on the efficiency and
financial performance of banks. It has great influence upon performance and profitability of the
banks. He also claimed that satisfied customers share their experiences with other people and
occupy unambiguous word of mouth (grapevine) advertisement and publication of the banks. This
positive word of mouth publication is very helpful in increasing banks relationship and interaction
with the whole community. Many literatures found that there is strong relationship between
customer satisfaction and organizations efficiencies, operational and financial. The state of
satisfaction depends on a number of factors which consolidate as psychological, economic and
physical factors. The quality of service is one of the major determinants of the customer satisfaction
(Kumbhar, 2011).

Information communication technology on customer satisfaction

Innovation technology is one way that employer can boost productivity. According to Dauda &
Akingbade (2011) technological innovation rests on the creative ability of human being. Man has
the capacity to use his knowledge to create new machines process and method that could enhance or
improve the quality of goods and services. Technological advancement is important factor for
influencing the improvement of performance. Imran (2014) concluded in his study that,
technological advancement has significant impact on employee performance it means that as
technology tend to be advanced, performance of employee enhanced. Technological innovation
such as, the use of computer automation and electronic banking influence speed of bank service
delivery, enhanced management decision making and saving time (Dauda and Akingbade, 2011).
He continued, there is evidence that a significant and positive relationship exit between technology
innovation and banks employee‟s performance. For instance, Electronic bank transfers have
facilitated improved service delivery by employees, promotes customers retention and customers
satisfaction.

9
It is easier for employees to perform all these functions as a result of impact of technological
innovation on them. Ojokuku and Sajuyigbe (2012), conclude that the introduction of electronic
banking system in the banking sector has helped tremendously to improve the productivity of bank
personnel, leading to efficiency and effectiveness in service delivery. Many studies have identified
varies variables or factors that affect employees performance in work place. Saeed et. al. (2013)
concluded that there are five factors which affect the 26 performance of employees.

Most of the initiatives regarding technology are aimed at providing better and more efficient
customer service by offering multiple options to the customer. The death of distance, which is a by-
product of technology, has become a reality in the banking sector. Technology is also playing a key
role in banks‟ strategies for gaining a competitive edge (R.K. Uppal, 2008). According to Alalade
et al. (2014), the application of information and communication technology concepts, techniques,
policies and implementation strategies to banking service, has become a subject of fundamental
importance and concern to all banks and indeed a prerequisite for local and global competitiveness.
ICT directly affects how managers decide, how they plan and what products and services are
offered in the banking industry. According to R.K. Uppal (2008), the relationship between IT and
banking is fundamentally symbiotic. In the banking sector, IT can reduce costs, increase volumes,
and facilitate customized products; similarly, IT requires banking and financial services to facilitate
its growth.

Alalade et al. (2014) argued that the most significant shortcoming in the banking industry today is a
wide spread failure on the part of senior member of management in banks to grasp the importance
of technology and incorporate it into their strategic plans accordingly. He continued that banks
should re-examine their service and delivery systems in order to properly position them within the
framework of the dictates of the dynamism of information and communication technology. Many
studies agreed that there is a positive relationship between ICT and performance of banking in
terms of quality service delivery, customer satisfaction and attraction, employee‟s productivity, cost
reduction, profitability, and effective decision making.

The advancement in technology has played an important role in improving service delivery
standards in the banking industry. In its simplest form, Automated Teller machine and deposit
machines now allow consumers to carry out banking transactions beyond banking hours. With
online banking, individuals can check their account balances and make payments without having to
10
go to the banking hall. There is also, mobile banking which allows individuals to check their
account balance and make fund transfers using their mobile phones. This is gradually creating a
cashless society where consumers no longer have to pay for all their purchase with hard cash
(Wisdom, 2012). He finally conceded that the growth in the application and acceptance of internet-
driven technology means that delivering an enhanced service is more achievable than ever before.

Many industries embark on improving customer satisfaction by getting the latest machines to
improve their organization‟s performance. They believe that acquisition of latest technology will
improve operating practices and the quality and quantity of their goods and services (Dauda and
Akingbade, 2011). Banks provide customer - convenient and inexpensive access to the bank 24
hours a day and 7 days a week. Online banking extends the relationship with the customers through
providing financial services right into their home and office. The bank may also enjoy the benefit in
terms of increasing customer loyalty and satisfaction (Shaikh, 2014). According to Wisdom (2012),
online banking ensures customer satisfaction as it extends financial services to customers outside
the banking hall. Similarly, e-banking has provided banks with a large customer base as it has
resulted in increased customer loyalty and satisfaction.

Rahman (2014) argues that the use of technology has significantly increased customer satisfaction
index. In the banking industry, According to Wang, et al., (2014), there are numerous was in which
IT has influenced customer satisfaction in the banking sector. This includes the provision of internet
banking, provision of mobile banking, provision of e-loans among others. According to Rahman
(2014) internet banking is used synonymously with electronic banking to refer to banking
transaction over an electronic internet enabled medium. Internet banking has a wide range of
platforms including telephone banking, online banking, use of ATM, use of Debit and Credit Card,
and finally Electronic Funds Transfer (EFT) and the Real Time gross settlement (RTGS).

In Ethiopia cash is still the most dominant medium of exchange, and electronic payment systems
are at an embryonic stage (Worku, 2010). Bultum (2014) concurred that the development of
Ecommerce, adoption and diffusion of E-banking system is not well developed in Ethiopia. All
banks in Ethiopia are too late to move with technological advancement and they should clearly
chart out the time schedule for their integration and technological advancement. Even though
currently there are three government and sixteen private banks in the Ethiopian banking industry,
the modern e-banking services like ATMs, Payment cards, Tele banking, Internet banking, Mobile
11
Banking and other are new to the industry. ATM combines a computer terminal, record-keeping
system and cash vault in one unit, permitting customers to enter the bank‟s book keeping system
with a plastic card containing a personal Identification Number (PIN) or by punching a special code
number into the computer

Internet banking the idea of internet banking is to give customers access to their bank accounts via
a web site and to enable them to enact certain transactions on their accounts, given compliance with
stringent security checks. It is used to provide traditional banking service over the internet (Oppong
et al., 2014).
Mobile Banking Mobile banking is a service that enables customers to conduct some banking
services such as account inquiry and fund transfer, by using of short text message (SMS) (Bultum,
2014).
Telephone Banking Telebanking (Telephone Banking) can be considered as a form of remote or
virtual banking, which is essentially the delivery of branch financial services via telecommunication
devices where the bank customers can perform retail banking transactions by dialing a touch-tone
telephone or mobile communication unit, which is connected to an automated system of the bank by
utilizing automated voice response (AVR) technology (Oppong et. al., 2014).

H2: Information technology has an impact on customer satisfaction.

Price fairness
According to Kotler and Armstrong (2010) price is the amount of money charged for a product or
service, or the sum of the values that customers exchange for the benefits of having or using the
product or service while Stanton and Michael (1994) defined price as the amount of money or
goods needed to acquire some combination of another goods and its companying services. But the
marketing literature showed researchers' inclination towards price fairness in relation with customer
satisfaction (Hermann et al, 2007). Price fairness refers to consumers' assessments of whether a
seller's price is reasonable, acceptable or justifiable (Xia et al, 2007). Price fairness is a very
important issue that leads toward satisfaction. Charging fair price helps to develop customer
satisfaction and loyalty.

12
Research has shown that customer's decision to accept particular price has a direct bearing at
satisfaction level and loyalty and indirectly (Martin-Consuegra, & Molina , 2007). In another study
of Hermann et al, (2007), it was concluded that customer satisfaction is directly influenced by price
perceptions while indirectly through the perception of price fairness. The price fairness itself and
the way it is fixed and offered have a great impact on satisfaction. Marzieh & Davood, (2012)
identified customers preferred dimensions that include: financial considerations (interest earnings,
interest payments); branch environment-related considerations (atmospherics); and convenience-
related considerations (ATMs, opening hours).
H3: Prices fairness has a positive and significant impact on customer satisfaction.

2.2. Empirical Review of Literature

Potluri and Zeleke (2009) investigated the influence of employees‟ competency to customer
satisfaction in Ethiopian banking sector. The study asserted that competencies are observable
behaviors, knowledge, skills, and abilities of marketing personnel to attract and retain customers by
delivering quality service. The study found that competent frontline employees are invaluable assets
for any organization‟s survival in the dynamic and competitive environment. The study
recommended that in assessing the competency level of employees helps organizations to
communicate desired behaviors, control costs and increase customer satisfaction.

Awanet al. (2011) investigated the service quality and its relationship to customer
satisfaction among the customers of conventional banks and Islamic banks. They carried a
survey using a modified SERVQUAL scale to 200 walk-in customers conveniently drawn. The
study used regression analysis and identified five service quality dimensions namely; empathy,
service architecture, convenience service encounter, employee service criteria, customer focus
and five customer satisfaction dimensions: responsiveness, competency, safe transaction,
competitive services and knowledge for the overall banking

Shanka (2012) studied the relationship between service quality, customer satisfaction and loyalty
using five dimensions of SERVPERF model which are reliability, assurance, tangibility, empathy
and responsiveness in private banks in Ethiopia. The study used correlation and multiple
regressions to analyze data from a convenient sample of 260 respondents. The study shows that all
service quality dimensions are positively correlated with customer satisfaction

13
A research conducted by Mesay, (2012) tried to investigate the relationship between service quality,
customer satisfaction and loyalty and the result indicated that offering high quality service increase
customer satisfaction which in turn leads to high level of customer commitment and loyalty. In
addition, it was showed that there is a positive and significant link between customer satisfaction
and service quality like tangibility, reliability; competence conflict handling and inferred that
customer satisfaction is positively significant related to customer loyalty (Mohsin et al, 2012). In
addition to this even the customer‟s expectations towards particular services are also changing with
respect to factors like time, increase in the number of encounters with a particular service, and
competitive environment.

As Haq and Muhammad (2012) found out by comparing public and private sector banks of Pakistan
by evaluating their customer satisfaction.The study used questionnaires which were distributed to
351 respondents. The study showed that customers‟ satisfaction varies according to the nature of
services and in this case, highest customers‟ satisfaction is shown in such areas like price charged
by banks which is nominal, convenient location of bank branches and staff attitude toward problem
solving of customers. Moreover, when the private sector banks are compared with public sector
banks, private bank customers were more satisfied with their bank because of
their multiple branches at convenient locations and technology.

Bahraini, (2012) found out that employee behavior and how they interact with customers were the
most important and fundamental factor in increasing the quality of bank services besides the
reliability, innovation in banking services and profit and convenience. The study tried to measure
customer satisfaction by using factors that include employee behavior, competence and skills of
staff, innovation and diversity in service, benefit and facilities, how to respond, physical facilities,
reliability, ease of service and bank‟s reputation and thus, suggested banks to be innovative and to
diversify their services. Through technological development accessibility has been extended and so
introduction of new service delivery channel that enable consumer to do business with service firms
from home or office. In banking services, attributes like: appearance of the facility, attitude and
behavior of staff, decor and atmosphere, business hours, interest rate and waiting time are used for
the measurement of satisfaction

A study (Alabar, 2012) showed the positive impact of e-banking (accessibility, convenience,
security, privacy, content, design, speed, fees and charges) on commercial bank customers'
14
satisfaction, loyalty, and positive words-of-mouth. The application of various technological devices
in promoting/achieving better customer service delivery guaranteed customer satisfaction that
translates into increase profitability and higher return on investment.

According to research conducted by Ernst & Young (2012) 78% of banks‟ clients in the Czech
Republic control their bank accounts by using the internet. For comparing it could be
stated, that in Slovakia this option was mentioned by 67% of respondents back in 2012. A study by
Cabanillas and Guardia (2013) user satisfaction levels with online banking have increased in recent
years, reaching more than 80%. Authors also indicate, that online banking also was favored over
other channels that customer have at their disposal (55% selected the online channel as one that
satisfied them the most, while 28% chose branches, 13% chose ATMs, and only 2% chose call
center and mobile banking as the channel that satisfied them most).

Oduro (2013) investigated factors that determine customer satisfaction level in banking institutions
from Ghanaian Banking Industry .His study used factor analysis and found that three factors
influence consumers‟ satisfaction level of the banks. These factors were found to be customer
relation and service, staff competency and responsive and convenient banking.

A study conducted by Arokiasamy (2013) in Malasya indicated that there exists a relationship
between customer mobile banking and customer satisfaction. However, he was quick to point out
that most of the banks customers surveys were in the mid- to late-thirties, and therefore could not
conclusively infer the finding to the large population utilizing banking services.

As Mukhtar et al. (2014) documented on customer satisfaction towards financial services of banks
in Bahawalpur, Pakistan. The study used correlation analysis to check the intensity of relation of
customer satisfaction with dimensions of service quality. These dimensions included reliability,
assurance, responsiveness, empathy and tangibility. The study found that service quality is
positively correlated with customers‟ satisfaction. The most important variable that affects
customer satisfaction is tangibility, which is followed by assurance. Regression equation derived
from regression analysis shows that only assurance and tangibility has significant correlation with
customer satisfaction, but reliability, empathy and responsiveness has no importance relationship
with customer satisfaction.

15
According to a study done by KPMG (2015) indicates that the rapid proliferation of smartphones
and tablets globally, both in developed countries and developing countries has fueled on the mobile
banking, raising the number of people who use mobile banking to 0.8 billion. Adoption rates of
mobile banking are highest reaching 60- 70% in China and India. The study further suggests that
the number of mobile banking users is set to rise to 1.8 billion people by 2019.So this shows ICT
facilities has an impact on customer satisfaction then retention.
A study conducted by yalew, (2015) suggested that the share of using technology-based service
products by the customer on his/her overall satisfaction is about 80.3%. Based on this it can be
conclude that the impact of Information and communication Technology on customers satisfaction
is very strong and significant impact on customer satisfaction in Ethiopian private banking
industry.

2.3. The Conceptual Framework

The conceptual frame work shows that the three independent variables namely
service quality, information technology and price fairness has an impact on
dependent variables (customer satisfaction), and for the service quality there are the
five dimension used to measure this variable.

16
Figure 2.4.1 conceptual frame work

service quality

• reliability
• Tangibility
• Responsivenes
• Assurance
• Empathy
Information
• price Technology
fairness
facilities

Customer
satisfaction

17
 CHAPTER THREE
Research Methodology

3.1. The research design

The descriptive research design approach was used in this research. This is because the intention of
this study is to describe the present satisfaction level of the customers with regard to factors like
services quality, ICT and pricing. This design was also enabled the researcher to determine and
report on how customers are satisfied or not. This enabled as (Saunders, et al, 2014) when
collecting data a researcher is to remain objective and only interpret data and information as
received.

3.2. Target population and sampling design

3.2.1 Target population

Saunders, et al., (2014) defines a study population as the total group of elements, possessing
common observable characteristic, that a researcher is interested in conducting a study; a population
constitutes the total sum of objects and elements from which a researcher wishes to draw
conclusions. For this study, the population is customers of Bank of abyssinia Negussahilesilassie
branch. The researcher selected this bank randomly among the private banks of debre birhan town.

3.2.2 Sampling design

The convenience sampling technique was applied for this study. Convenience sampling is a type of
sampling where the first available primary data source was used for the research without additional
requirements. In other words, this sampling method involves getting participants wherever you can
find them and typically wherever is convenient. In convenience sampling no inclusion criteria
identified prior to the selection of subjects. All subjects are invited to participate. In addition it has
these advantages: Simplicity of sampling and the ease of research, Helpful for pilot studies and for

18
hypothesis generation, data collection can be facilitated in short duration of time, cheapest to
implement that alternative sampling method. Therefore, 124 customers and 2 key informants were
selected to get primary source of information. The participants were selected using convenient
sampling technique, Non-probability sampling method (Saunders et. al., 2009). According to
Saunders et.al. (2009) unlike probability sampling, there are no rules in non-probability sampling
techniques. Key informants were the manager and head of marketing department this is because
they can give a detailed information for the question prepared as entirely concerns them. The key
informants were interviewed about the satisfaction and dissatisfaction level of customers.
Generally, the researcher selected the respondents (customers) who had either saving account or
current account at BOA bank Negussahilesilassie branch.

3.3. Data Type and Source

Data was collected from primary sources. Primary data were gathered from customers of Bank of
abyssinia of Negussahilesilassie branch using questionnaires. The questionnaire consisting of close
ended questions for customers.

3.4. Method of Data Collection

Both self-administered and schedule types of questionnaires were used as a data collection
instrument from customers. The use of questionnaires is justified to the extent that questionnaires
are effective way of collecting information from a large literate sample in a short span of time and
at a reduced cost than other methods. The questionnaires were made use of closed ended questions
to ensure consistency, easy coding, and data analysis. Questionnaires are divided in to four parts.
The first part of the questionnaire deals with the demographic characteristics of the respondents
(age, gender, educational qualification, etc.). Through this questionnaire, information that reveals
the effect of demographic factors on factors like: service quality, availability of ICT facilities and
charge of fair price were being examined. Second part of the questionnaire was designed to rate
customers perception of the service quality based on SERVIQUAL dimensions modified for
banking sector (Schemenner, 2004).Third part of the questionnaires were designed to collect
information from customers that reveal their satisfaction level with regard to availability of ICT
facility of Bank of abyssinia of Negussahilesilassie branch. The fourth part of the questionnaire
information that shows customers perception that charge of fair price of the bank, the fifth part is
about to measure level of customer satisfaction. Except the first part, the remaining three
parts of the
19
questionnaire had five point likert scale type ranging from 1 strongly disagree to 5 strongly agree.
Finally, there were an interview questions for key informants of the bank.

3.5 Data Analysis Techniques

Copper and Schindler (2014) defines data analysis method as the use the statistical and non-
statistical analysis of collected data by a researcher so as findings. Before data analysis is
conducted, all data received from respondents was checked for completeness, and where data was
missing, specific respondent for the questionnaire would be sort to provide missing data. Also, data
cleaning and cording was being conducted for each questionnaire. The methods had to be able not
only to present summaries of the finding in a friendly way, but also in a way that can be tested and
verified by other researchers and scientists.

Descriptive methods were used to analyze data for this study. Descriptive analytical method were
used frequencies, percentages, mean, and standard deviation to see the distribution of variable

20
 CHAPTER FOUR
RESULT AND DISCUSSION

4.1 Introduction

This chapter covers the presentation, analysis and interpretation of data collected from primary
sources. The data gathered through questionnaire and interview. A total of 124 questionnaires were
distributed to Bank of abyssinia S.C Negussahilesilasie branch of customers in order to collect data
of assessment on factors affecting customer satisfaction. As shown in table 4.1.1 out of the
questionnaires distributed to 124 conveniently distributed customers replies were obtained from120
customers. The collected data are presented by frequency tables and charts where ever necessary .
The correlation to see the variation and the amount of correlation between two or more variables
and multiple linear regressions, to see relationship of a set of independent variables to a dependent
variable and it allows to explain or to predict a dependent variable. And appropriate interpretations
were made thereon in accordance with the results of the testing.

4.2 Response Rate of Respondents

Table 4.2.1: Rate of Responses

Questionnaires Responses Valid percentage

Returned 120 96.8
Not returned 4 3.2
total 124 100

Questionnaires were conveniently distributed for 124 customers of Bank of abyssinia

Negussahilesilas branch) of which 120 questionnaires were filled and returned.

21
4.3 Demographic Profile of Respondents

Table 4.3.1 Customers‟ Profile:

S.N Variables Classification Frequency Percent

1 Age 18-29 39 32.5

30-45 47 39.1
40-60 34 28.3
total 120 100
2 Gender Male 81 67.5
Female 39 32.6
total 120 100
3 Educational Primary 22 18.3
level Secondary 49 40.8
Diploma 37 30.9
First degree 12 10
Total 120 100
4 Years of < 1year 24 20
relationship 1-3 years 75 62.5
4-7 years 21 17.5
Total 120 100
5 Type of Saving deposit 92 76.7
services Current account 28 23.3
transacted total 120 100

As it is shown in the above table, 81 of the respondents were male which represent 67.5% of the
total respondents, while the 39 were females which are 32.6% of the total respondents. Considering
the age groups of the respondents, the higher number of respondents was in the age of 30-45 years,
which represent 39.1%, followed by age groups of 18-30 years and 40 and above years, which
represent 32.5% and 28.3% respectively. The table also showed out of the total participants, who
have bachelor Degree (10%) and Diploma (30.9%) , while customers who were secondary and
primary (40.8)and (18.3%) respectively. In addition form the above, 62.5% their relationship with
the bank is 1-3 years, and 20% is less than one year and lastly, 17.5 % of the respondents is 4-7

22
years. Finally, from the table that shows the BOA bank at Negussahillesilassie branch the most
frequent services fetched by respondents were deposit service, 76.7%; and current account,
23.3%.

4.4 Service quality in BOA Negussahilesilassie branch

The following section seeks to display and analyze the frequency distribution of the responses on
the questionnaire items regarding service quality of the five dimensions based on SERVQUAL
measure on customer satisfaction. Those dimensions showed in tables below separately as
Reliability, Tangibility, Responsiveness, Assurance and Empathy factors were discussed.

23
Table 4.5.1 Analysis of service quality Reliability dimension in BOA S.C (n=120)

S. SDA DA Neutral Agree S. Agree Likert

N Items mean
F % F % F % F % F % score
(SD)
1 I am satisfied with the 2.58
services provided by the 20 16.7 30 25 51 42.5 19 15.8 - - (0.950)
bank as promised.
2 I am satisfied with the 2.48
service of handling a 42 35 26 21.7 13 10.8 31 25.8 8 6.7 (1.37)
problem (speed of problem
solving)
3 I am satisfied with the 2.48
operating hours of the 29 24..2 27 22.5 23 19.2 25 20.8 16 13.3 (1.37)
bank.
4 I am satisfied with the way 2.93
bank deliver up to date and 20 16.7 26 21.7 24 20 43 35.8 7 5.8 (1.217)
accurate records.
5 The bank is dependable. 38 31.7 23 19.2 17 14.2 41 34.2 1 8 2.53
(1.276)

As shown in the above table, 19 representing 15.8% of the respondents agreed that the banks
provide the services as promised. 42.5 % and 41.7% of the respondents were neutral and disagree
with this statement respectively. 32.5 percent of the respondents were satisfied about speed of
problem solving of the customers, but 56.7% not. While 34.1 percent of respondents satisfied with
the operating hours of the bank and 46.7% not satisfied. With regards to the bank deliver up to date
and accurate records and dependability of the bank 41.6 percent and 42.2 percent, of the
respondents were satisfied, but 38.4% and 50.9% not satisfied respectively

Table4.5.2 Analysis of service quality tangibility dimension

S. Satisfaction with SDA DA Neutral Agree S. Agree Likert

N services # % F % F % F % F % mean
F score
& SD
6 I am satisfied with the
premises (infrastructure, 19 15.8 46 38.3 12 10 23 19.2 20 16.7 2.83
building etc) of the (1.364)
bank.
7 I am satisfied with the 10 8.3 39 32.5 25 20.8 30 25 16 13.3 3.03
up-to-date equipment of (1.205)
the bank.
8 I am satisfied with the 17 14.2 21 17.5 15 12.5 48 40 19 15.8 3.26
way employees dress. (1.312)

24
9 I am satisfied with the
marketing materials 18 15 34 28.3 15 12.5 36 30 17 14.2 3.00
distributed by the bank. (1.328)
They clear and give
complete information.

As from the above table, 54.1 percent disagree and 35.9 percent agree with the premises
(infrastructure, building etc.) of the bank, and 10 percent is indifferent with this services. As to the
up-to-date equipment of the bank 40.8 percent disagree and 38.3 percent agree, and 20.8 percent
indifferent with this idea. Similarly, 55.8 percent agree and 33.3 percent disagree and 12.5 percent
indifferent with the way employees dress. In addition, 43.3 percent disagree and 44.2 percent agree
and 12.5 percent indifferent with the marketing materials distributed by the bank. They clear and
give complete information.

Table4.5 -3 Analysis of service quality Responsiveness dimension

S. Satisfaction with SDA DA Neutral Agree S. Agree Likert

N services #F % F % F % F % F % mean
score&
SD
10 I am satisfied with the 12 10 26 21.7 14 11.7 41 34.2 27 22.5 3.38
security of the bank and (1.316)
security of my money
&transaction.
11 I am satisfied with the 15 12.5 28 23.3 21 17.5 30 25 26 21.7 3.20
employee‟s eagerness of (1.351)
instilling confidence to
me.
12 I am satisfied of the
knowledge of the 25 20.8 43 35.8 18 15 25 20.8 9 7.5 2.58
employee‟s up to date (1.241)
knowledge.
13 I am satisfied in their 20 16.7 34 28.3 20 16.7 33 27.5 13 10.8 2.88
speed and efficiency of (1.287)
services

From the table above, out of the total respondents, 68 customers representing 56.7% agreed and 38
customers representing 31.7 percent disagree with the security of the bank and security of my
money &transaction,11.7 percent is indifferent.whereas,46.7 percent agree and 35.8 percent
disagree with the employee‟s eagerness of instilling confidence to client ,and 17.5 percent is

25
indifferent. Similarly, 56.6 percent disagree and 31.6 percent agree that employees have up to date
knowledge about products, services, rules& regulation and polices on the bank, 28.3 percent is
indifferent. With regard to the speed and efficiency of services 45 percent disagree and 38.2 percent
agree and 16.7 percent is indifferent.

Table4.5.4 Analysis of service quality Assurance dimension

S. Satisfaction with SDA DA Neutral Agree S. Agree Likert

N services #F % F % F % F % F % mean
score
&SD
14 The bank staff 12 10 16 13.3 15 12.5 49 40.8 28 23.3 3.54
trustworthy (1.263)

15 If I need help the 20 16.7 28 23.3 22 18.3 32 26.7 18 15 3.00

bank staff could (1.335)
explain clearly
16 I am satisfied in their 14 11.7 19 15.8 16 13.3 47 39.2 24 20 3.4
politeness (1.293)
17 The staff is confident 23 19.2 40 33.3 9 7.5 34 28.3 14 11.7 2.80
in service delivery (1.351)

Out of the total respondents‟ 86 customers representing 64.1% of the total responses agreed that the
bank staff trustworthy. Only 23.3 percent disagree with the statement and 12.5 percent is
indifferent. While 41.7 percent agree that the bank staff could explain clearly whenever help is
needed, and 40 percent disagree 18.3 percent is indifferent with the statement. On the other hand
59.2 percent agree, 27.5 percent disagree, and 13.3 percent is indifferent with the politeness of the
bank workers. In addition, confidence of the staff in service delivery 52.5 percent disagree, 40
percent agree, and 7.5 percent is indifferent.

26
Table4.5.5 Analysis of service quality Empathy dimension

S. SDA DA Neutral Agree S. Agree Likert

N #F % F % F % F % F % mean
score
18 The Bank is serving 18 15 28 23.3 16 13.3 36 30 22 18.3 3.13
each customer (1.365)
individualized attention
19 Employees of the bank 17 14.2 39 32.5 15 12.5 35 29.2 14 11.7 2.92
to fully understand the (1.287)
needs of the customer
20 The Bank is operating at 13 10.8 28 23.3 19 15.8 38 31.7 22 18.3 3.23
hours convenient to all (1.295)
customers
21 I am satisfied the bank 27 22.5 28 23.3 19 15.8 23 19.2 23 19.2 2.89
caring for me. (1.448)

Regarding Empathy of BOA, 48.3 percent agree and 38.3 percent of the respondents were disagree
,and 13.3 percent indifferent about the Bank is serving each customer individualized attention;
while 46.7 percent disagree and 40.9 percent agree and 12.5 percent indifferent on employees of
the bank to fully understand the needs of the customer. In addition, about 50 percent expressed their
agreement and 34.1 disagreements, 15.8 percent is indifferent that The Bank is operating at hours
convenient to all customers. With regard to caring personally of the bank, 45.8 percent disagree and
38.4 percent agree with the statement.

As interview conducted with the management person about whether their customers satisfied by
their service quality, the management response were that their customers in most cases have been
satisfied by the bank services.

4.5 The level of satisfaction on information technology

The following section seeks to display and analyze the frequency distribution of the responses on
the questionnaire items regarding independent variables of the first research question; the impact of
ICT on customers‟ satisfaction.

27
 Table 4.6 Analysis of ICT facilities

SDA DA Neutral Agree S. Agree Likert

S. ICT factor #F % F % F % F % F % mean
N score
1 Availability and 16 13.3 39 32.5 13 10.8 26 21.7 26 21.7 3.06
convenient location of (1.398)
ATM machines
2 Availability of Internet 24 20 33 27.5 21 17.5 17 14.2 25 20.8 2.88
banking services. (1.433)
3 Availability Mobile 12 10 36 30 29 24.2 21 17.5 22 18.3 3.04
banking services. (1.273)
4 Availability of Telephone 26 21.7 43 35.8 29 24.2 10 8.3 12 10 2.49
banking (1.209)

As shown in the above table, 55 representing 45.8% of the respondents are disagreed that
availability and convenient location of ATM machines. 43.4 % and 10.8% of the respondents were
agreed and neutral with this statement respectively. While 47.5percent of respondents disagreed on
availability of Internet banking services, 17.5 percent and 35 percent neutral and agreed
respectively. Similarly, on availability mobile banking services 40 percent disagreed and 35.8
percent agreed, 24.2 percent neutral. In addition, concerning availability of telephone banking 57.5
percent disagreed 24.2 percent neutral and 18.3 percent agreed to this statement.

4.6 The level of satisfaction on price fairness

This section also tried to display and analyze the frequency distribution of the responses on the
items of independent variables that the level of satisfaction on price fairness.

Table4.4.7 Analysis of price fairness factor

S SDA DA Neutral Agree S. Agree Likert

. Price factor mean
N #F % F % F % F % F % score &
SD
1 Interest rate on 20 16.7 37 30.8 30 25 18 15 15 12.5 2.76
loans/credits (1.257)
2 Its services charges 20 16.7 20 16.7 23 19.2 36 30 21 17.5 3.15
(1.351)
3 Its interest rate on 16 13.3 25 20.8 12 10 37 30.8 30 25 3.33
saving deposits (1.398)
4 I am satisfied in 31 25.8 35 29.2 16 13.3 25 20.8 13 10.8 2.62
obtaining loans. (1.355)

28
Out of the total respondent 57 customers representing 47.5% of the total responses disagreed 27.5
percent agreed and 25 percent neutral that Interest rate on loans/credits. Likewise 47.5% of the total
respondents or 57 of them agreed and 33.4 percent disagreed, 19.2 percent is neutral with service
charges of this bank. While 67 of the respondents representing 55.8% of the total respondents were
agreed, 34.1 percent disagreed and 10 percent neutral with interest rate on saving deposits. With
regard to obtaining loans 55 percent disagreed or not satisfied, 31.6 percent agreed and 13.3 percent
neutral.

4.7 Level of customer Satisfaction in BOA S.C

Regarding the overall satisfaction on BOA bank customers were asked whether they are satisfied
with the service or not. Accordingly, the results 42.5 percent was satisfied by the bank and 43.55
percent was dissatisfied by the BOA bank.

Table4.8.1 Respondents on Customer satisfaction

S. SDA DA Neutral Agree Str. Likert

N Agree mean
#F % F % F % F % F % score &
SD
1 I am satisfied with the 18 15 32 26.7 16 13.3 29 24.2 25 20.8 3.09
service my bank provides (1.396)
2 I am satisfied with how I 20 16.7 35 29.2 16 13.3 27 22.5 22 18.3 2.97
am treated by the bank‟s (1.390)
employees
3 I do not consider 12 10 45 37.5 21 17.5 30 25 12 10 2.88
switching to another (1.192)
bank to get better
service
4 I would recommend my 10 8.3 37 30.8 26 21.7 29 24.2 18 15 3.07
bank to others (1.221)

From the table above, on Customer satisfaction out of the total respondents, 54 customers representing
45% agreed and 50 customers representing 41.7 percent disagree with the satisfaction of the
services that the bank provides,13.3 percent is indifferent. Whereas, 40.8 percent agree and 45.9
percent disagree with the bank employees‟ treatment satisfaction to client and 13.3 percent is
indifferent. Similarly, 47.5 percent disagree and 35 percent agree with whether the customers
switching to another bank to get better service, 17.5 percent is indifferent. With regard to
recommending the bank to others 39.1 percent disagree and 39.2 percent agree and 21.7 percent is
indifferent.

29
Here the interview response with the management person about what standard they use to measure
the satisfaction of customer the response is no clear standard to measure but, they do have in other
way. With regard to the overall customer satisfaction and the factors that influence the satisfaction
of customer were asked and the response from the management person were that they believe
incompleteness of the mobile banking, internet banking and telephone banking Similarly, they
agree on their shortcoming of loan services. But, accept the overall customer satisfaction is high

4.8 Discussion of Results

The study has shown that the overall satisfaction was 42.5% customers were satisfied and very
satisfied. This level of customer satisfaction figure is lower than the study by (Tiruwork, 2013) at
Wogagen private bank which was 76% level of satisfaction and it also said that WB was the most
chosen bank by customers due to the wider operation and quality of service provision. On the other
hand, 43.5% in my study at BOA was not satisfied with services of the bank.

The knowledge of current levels of satisfaction and, in particular, the key factor of satisfaction
benefit those in the industry allowing them to focus and build upon key areas that lead to highly
satisfied customers (Levesque et al, 1996). Banking customer services demand the highest possible
quality services and others since product differentiation is not easy. The key effective tool that
distinguishes from competitors is through service excellence (Jayaraman, Shankar & HorWaiM,
2010). Hence, it is necessary, to follow and meet the current and future needs, expectations and
perceptions of customers to increase customer satisfaction.

According to above analytic results, this study examined the perception of service quality,
Information technology and fair price of banking services provided to customers in Bank of
abyssinia and the relative differences attached with the various factors of service quality using the
SERVQUAL model. The findings of the research suggest that customer satisfaction towards BOA
banking services in Negussahilesilassie town is significantly influenced by Reliability,
Information communication technology, Tangibility ,Price fairness, Empathy and Assurance. In
other words service quality, ICT and price fairness. But, Responsiveness hadn‟t significant impact
on customer satisfaction. It is found out that Reliability, Information communication technology
and Tangibility had the most significant impact on customer satisfaction towards BOA services
provided in Negussahilesilassie branch.On the other hand, Price fairness, Empathy and Assurance
had a little impact on customer satisfaction towards Bank of abyssinia Negussahilesilassie branch.

30
From this findings, it is clear that the customer expectation exceeds well in Reliability provided by
the BOA banks in Negussahilesilassie in terms of the services provided by the bank as promised ,
speed of problem solving, operating hours of the bank, the way bank deliver up to date and accurate
records and dependability of the bank. Similarly, customer expectation exceeds well in Information
communication technology provided by the BOA banks in terms of Availability and convenient
location of ATM machines, mobile banking and internet banking. In addition, Tangibility had too,
in terms of the premises (infrastructure, building etc) of the bank, the technological up-to-date

31
equipment of the bank, the way employees dress, the marketing materials distributed by the bank
and they clear and give complete information.

In addition from the regression result confirmed that the six independent variables explained 70.7%
customer satisfaction at Bank of abyssinia represented by R square and this therefore means other
factors not studied in this research contribute 29.3% of customer satisfaction at BOA of
Negussahilesilassie town. Therefore, further research should be conducted to investigate the other
factors 29.3% in Bank of abyssinia of Negussahilesilassie town. Similarly, it is argued that level of
satisfaction will always be high when the customers give minimum and fair price and get maximum
value or benefit and dissatisfaction occurs when the different prices and charges are high and
interest on saving are low. When these happen the customers will look around with competitor
banks and may challenge their loyalty and finally decide to defect. Based on this as shown from the
table-6 (40.6%) satisfied and very satisfied and 42.5% dissatisfied Still in other studies (Levesque,
& McDougall, 1996; Chakrabarty, 2004) reported that pricing, bank charges and interest rates were
the second largest determinant of customer satisfaction although in my study it is the fourth factor.

Though the findings in this study of Responsiveness has shown no impact on customer satisfaction,
as Parasuraman et al., 1988 , researched that willingness or readiness of employees to provide the
required customer service without any inconvenience at any time will strongly influence the level of
customer satisfaction ,in terms of the security of the bank and security of my money &transaction ,
the employee‟s eagerness of instilling confidence , the knowledge of the employee‟s up to date
knowledge and the speed and efficiency of services.. In this study at BOA, we analyzed the data to
find out whether or not socio-demographic variables such as gender, age and education have impact
on overall satisfaction. However, our analyses through correlation and regression cannot show the
existence of association between these variables and overall satisfactions.

32
 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

In this chapter conclusion and recommendations were made based on the results.

Conclusion

This study has focused on the factors that affect customer satisfaction at Bank of abyssinia
Negussahilesilassie abranch.The descriptive findings have shown that the percent of customers who
are satisfied and very satisfied altogether was 42.5%.This result was lower than a study conducted
by (Tiruwork,2013) at Wogagen bank which was 76% level of satisfaction. In addition previous
work made by (Habte, et al, 2015) at Commercial Bank of Ethiopia West Showa zone has shown
low customer satisfaction outcome in five branches. Similarly, this study has revealed moderate
level of customer satisfaction. So that the Bank of abyssinia Negussahilesilassie (Menaheriya
branch)needs an improvement to work for service excellence on the satisfaction of customers.
Analyses of factors that affect customers‟ satisfaction have shown that there are associations
between service quality factors, Information communication technology and price fairness with
overall customers satisfaction (Table 4.8.2).

Moreover, service quality and Information communication technology factors have significant,
positive, and strong correlates with overall customer satisfaction. The result of the study also
revealed the predictor variables services provided by the bank as promised, speed of problem
solving, the operating hours of the bank, the way bank deliver up to date and accurate records,
dependability of the bank, Availability and convenient location of ATM machines, use of Internet
banking services, Availability Mobile banking services and Telephone banking were highly affects
customer satisfaction. So the BOA has to realize that in today‟s competitive world, banks can get
competitive advantage by providing superior services to their customer. However, I cannot see
association between Responsiveness and overall satisfaction. The specific services factors asked
were: the security of the bank and security of my money & transaction, the employee‟s eagerness of
instilling confidence to me, the knowledge of the employee‟s up to date knowledge about products,
services, rules & regulation and polices on the bank and the speed and efficiency of services.

The study results also reached this premises of factors were found to significantly and positively
affect customer satisfaction with 70.7% of the customer satisfaction being explained by these
factors perceived quality of services, Information communication technology and price fairness.
33
RECOMMENDATION

Based on the result of the study, the following recommendations were drawn.

As there is stiff competition among banks and other financial institutions in acquiring and retaining
customers, Bank of abyssinia of Negussahilesilass branch) must take into considerations the
dynamic environment in strengthening customers‟ focused and customer satisfaction strategy; the
three factors namely: service quality, Information communication technology and price fairness
which have association with overall customer satisfaction. The specific service factors to look into
to improve customer satisfaction include primarily: services provided by the bank as promised,
speed of problem solving, the operating hours of the bank, the way bank deliver up to date and
accurate records, technological up-to-date equipment of the bank, the marketing materials
distributed by the bank ,clearing and giving complete information. The second issue of the bank
expected to improve on convenient location of ATM machines, Internet banking services, mobile
banking services, and telephone banking services. Thirdly, the BOA has to make an improvement
on interest rate on loans/credits, service charges and obtaining loans. In addition, since the level of
customers‟ satisfaction is moderate at this bank; it is more advisable and recommended if
concerned body works cooperatively for more in maximizing satisfaction of their customers.

34
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 Appendixes- 1

Negussahilesilassie University Business & Economics College

Management
Department
Questionnaire
Questionnaire to be filled by customer only The purpose of this questionnaire is to collect data,
for conducting MBA thesis on Assessment of factors affecting customer satisfaction in Bank of
abyssinia Negussahilesilassie branch. The questionnaire is prepared to help the study through your
attitude and behavior related to quality service usage satisfaction. Fill free in responding for the
questionnaire, any of your response to the questionnaire is confidential and used for academic
purpose only.

Belay Mesfin

Part I. General information

1. Bank name
2. Type of account : current Saving Fixed deposit
Any other
3. Gender male Female
4. Age group :

Under 18 years 18-29 years 30—45 years

46—60 year above 60 years

5. Your education level: primary secondary Diploma

First Degree Master‟s degree and above

39
 6. How many years are you a customer at this bank?

<, 1 year 4-7 years

1-3 years above 8 years

Part .II Factors that affect customer satisfaction.

Kindly tick“√” the answer that best represents your views.

S.N. Research questions Strongly Disag- Neut- agree Strong-

disagree ree ral ly agree
I. service quality
Reliability
1 am satisfied with the services provided by the
bank as promised.
2 I am satisfied with the service of handling a
problem (speed of problem solving)
3 am satisfied with the operating hours of the bank.
4 am satisfied with the way bank deliver up to date
and accurate records.
5 The bank is dependable.
Tangibility
6 I am satisfied with the premises (infrastructure,
building etc) of the bank.
7 am satisfied with technological up-to-date
equipment of the bank.
8 am satisfied with the way employees dress.
9 I am satisfied with the marketing materials distributed
by the bank .They clear and give
complete information.
Responsiveness
10 am satisfied with the security of the bank and
security of my money &transaction .
11 am satisfied with the employee‟s eagerness of
instilling confidence to me .
12 am satisfied of the knowledge of the employee‟s up
to date knowledge about products, services,
rules& regulation and polices on the bank.
13 am satisfied in their speed and efficiency of
services
Assurance
14 The bank staff trustworthy.
15 If I need help the bank staff could explain clearly
16 am satisfied in their politeness
17 The staff is confident in service delivery
Empathy
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18 The Bank is serving each customer individualized
attention
19 Employees of the bank to fully understand the
needs of the customer
20 The Bank is operating at hours convenient to all
customers
21 I am satisfied the bank caring for me.
II. Availability of ICT facilities
22 Availability and convenient location of ATM
machines
23 Availability of Internet banking services.
24 Availability Mobile banking services.
25 Availability of Telephone banking
III. Prices and interests
26 Interest rate on loans/credits
27 Its services charges
28 Its interest rate on saving deposits
29 I am satisfied in obtaining loans.
IV. Customer satisfaction
30 I am satisfied with the service my bank provides
31 I am satisfied with how I am treated by the bank‟s
employees
32 I do not consider switching to another bank to get
better service
33 I would recommend my bank to others

Anything else, you want to comment the overall experience of the bank

41
 Interview question for management person

1. Do your customers are satisfied by the service you deliver to them?

2. Do you probably know the factors that your customers complain your services and give
solution?
3. What standard does your organization use to measure customers‟ satisfaction?
4. How do you see overall customer satisfaction?

42