The Effect of Service Quality on Customer Loyalty: the case on Commercial Banks in Ethiopia

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Addis Ababa University


The major aim of the study was to examine the effect of service quality on customer loyalty on commercial Banks in Ethiopia. Moreover, the study tries to investigate the relationship between service quality and customer loyalty. Bank service quality (BSQ) model of Bahia and Nantel,(2000) was used to evaluate overall level of service quality and its effect on customer loyalty. The model had six factors; effectiveness and assurance, price, Access, Tangibles, Service portfolio and Reliability. Descriptive and explanatory research approaches were used. Four commercial banks namely CBE, Dashen bank, united Bank and Wegagen banks were selected randomly and 384 questionnaires were administered to customers of all banks using convenience-sampling method and 300 responses were analyzed in to SPSS version24. The correlation result indicated that there is a positive and significant relationship between all BSQ dimensions and customer loyalty. Tangible dimension has the highest effect on customer loyalty. Moreover, the regression result indicated that effectiveness and assurance and reliability have a positive but insignificant effect on customer loyalty



Banking Service quality, customer loyalty