Service Quality Measurement and Enhancement Approach for Banking Sector: - Case of Development Bank of Ethiopia

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Addis Ababa University


Service quality has stood on the very importance for the service industry. Service Quality has been identified as one of the most effective means of building a competitive position and improving organizational performance. With current status on the banks industry, competitions are becoming fierce which in turn clients are raising their expectations for high service quality. Beside to this, the usual core process of loan with the associated loan cycle time has a great influence on the service delivery. This research was conducted on service quality measurement and enhancement approach for bank sector and Development Bank of Ethiopia (DBE) selected as a case company. For this study purpose, the research was mainly targeted interviewing and questioning the top management of the DBE to find the root causes of customer complaints. From the interview and post analysis, eight (8) main root causes of customer complaints were found within the selected case company. In finding the key solution for the raised root causes, understanding of the explicit loan process of the DBE was conducted which depicts that project financing and lease financing loan modalities prevails the most. In such a way, this research purely revolves on these processes to investigate the service quality. This research used the integration of SERVQUAL-Kano with QFD for identifying the customer requirement and for the subject decision of the technical requirement of the Bank using the AHP approach. The researcher prepared a questionnaire in English and Amharic for SERVQUAL and KANO model, SERVQUAL model was used to measure the current service quality and identify the weak features but no prioritized features for service improvement. Therefore, Kano model was used for categorization and prioritization of the weak feature. From the results of SERVQUAL and KANO models, seven features were selected by DBE experts to service improvement into HOQ. Through the QFD method, adopt peer to peer has the best technical requirement and conducting relevant training has the second technical requirement to answer the customer needs. Therefore, Adopt peer to peer and conducting relevant training will improve in the case company 13.10% and 11.65% respectively. The researcher recommended the case company to start with establishing of quality planning, quality control, and quality goals as per customer requirements and follow the continuous improvement of service quality.



Service quality, Customer satisfaction, Bank, SERVQUAL model, KANO model, AHP, QFD