Factors Affecting Customers’ Decision to Adopt Interest Free Banking in Ethiopia: The Case of Dashen Bank S.C.

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Date

2023-12-03

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A.A.U

Abstract

This paper aims to examine the main Factors Affecting Customers’ Decision to Adopt Interest Free Banking in Ethiopia: The Case of Dashen Bank Share Company. The researcher employed a cross-sectional explanatory research design and also a quantitative research approaches were used to collect and analyze primary data. This research collects primary data by distributing questionnaires to 398 customers of Interest Free Banking services in Addis Ababa and a total of 340 questionnaires were returned and used for analysis. The independent variables in this study are awareness, bank reputation, perceived complexity, perceived compatibility, perceived risk, relative advantage, religiosity, and social influence. Meanwhile, the dependent variable is customers’ decision to adopt interest free banking services. The result of this study indicates that awareness, bank reputation, social influence and perceived compatibility have a positive effect on customers’ decision to adopt interest free banking services. Likewise, perceived complexity, relative advantage and religiosity have a significant and positive effect on customer intention to adopt interest free banking services. Meanwhile, perceived risk has a negative and significant effect on customers’ decision to adopt interest free banking services in Dashen Bank Share Company. The study suggested that in order to assist the adopting of interest free banking services in the bank, the banks must actively promote themselves to the public to improve the reputation of interest free banking and to introduce innovations available in adopting interest free banking services. Keywords: Interest Free Banking, Awareness, Bank Reputation, Perceived Complexity, Social Influence, Perceived Compatibility, Perceived Risk

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