Customers’ Evaluation of Service Quality in Ethiopian Private Banking Sector

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Addis Ababa University


The study focused on the perception of service quality in Ethiopian private banking sector. And the effect that quality perception has on satisfaction and loyalty behavior of customers. In the research a bank tailored service quality model was used to evaluate the level of service quality from the perspective of customers i.e. The Banking Service Quality (BSQ) scales. The model had six factor; Assurance and effectiveness, access, price, tangibles, service portfolio and reliability. Instrument based on the model was developed and further refined through a pilot study. Three representative banking organizations were conveniently selected in inclusive criterions to better account for the heterogeneity in the sector. Based on the criterion, Awash International Bank, Wegagen Bank and Abay bank were involved in the research. And 240 BSQ questionnaires were distributed to high grade branches in the respective banks. Among these 161 of them were deemed appropriate for statistical analysis. The reliability of the instrument was tested for and subsequently descriptive and parametric inferential statistics were conducted on the primary data to address the research questions and test relevant hypothesis. One-sample t-test on the means of the dimensions and items indicated the mean value is significantly different (greater than) from the average point of the scale (six-point Likert-scale) for all the BSQ dimensions’. This finding has showed customers of private banks have relatively good assessment service quality dimension. And Pearson correlation of between the BSQ dimension, overall service quality, customer satisfaction and customer loyalty has indicated the high level of association between the constructs. Finally, multiple regressions were conducted to define the causal relationship and importance of the Banking Service Quality (BSQ) dimensions in predicting and explaining the outcome variables of overall service quality, customer satisfaction and customer loyalty. Accordingly, the important service quality dimension in predicting customer satisfaction and loyalty were found out to be assurance and effectiveness, reliability and tangibles.



Service quality, customer satisfaction, customer loyalty