AN ASSESSMENT OF SERVICE QUALITY AND CUSTOMER SATISFACTION IN COOPERATIVE BANK OF OROMIA S.C: (THE CASE OF CENTRAL FINFINE DISTRICT)

Abstract

In modern time, quality conscious societies are giving a due attention towards the service quality they receive from service delivery organizations. This leads to an increase in customer’s demand for higher service quality. The general objective of this study was to assess the quality of service rendered and customer satisfaction in Cooperative Bank of Oromia s.c. The focus was on Central Finfinie district covering a total of five branches. To achieve the stated objective, we used the SERVQUAL instrument and design effective questionnaires in five dimensions of service quality: tangibility, reliability, responsiveness, assurance, and empathy. The data was then gathered by distributing the questionnaires to a total of one hundred respondents which are selected based on convenient sampling technique. The expectations and perceptions of CBO customers were assessed under the five dimensions of service quality using Statistical Package for Social Scientist (SPSS). Comparison of perception and expectation of service quality rendered by CBO revealed that reliability dimension shows a positive gap with a meaning of customer satisfaction. In contrary to this, the other dimensions showed a negative gap between perception and expectation leading customer dissatisfaction. Statistically using the paired sample test, assurance (-0.96), responsiveness (-0.95) and empathy (-0.74) are the major contributing factors for service quality and much has to be done in this regard. The overall customer satisfaction measurement also showed that customers’ expectation of service quality is greater than perception of service quality. This helps us to conclude that customers of the bank are unsatisfied. We also find out that there exists strong correlation between service quality and customer satisfaction which intern has a strong correlation with customer loyalty. Hence, to ensure customer retention and improve competiveness, CBO should regularly assess service delivered by continuously monitoring customers’ expectation and perception of service quality. Based on the finding, special recommendations were suggested and if the bank takes all the recommendations listed and work towards addressing customers’ expectation; customer satisfaction and customer retention is achievable.