CUSTOMERS` PERCEPTION TOWARDS INTERST FREE BANKING PRODUCTS AND SERVICES: IN SELECTED BRANCHES OF COMMERCIAL BANK OF ETHIOPA

Abstract

This study was conducted to assess CBE customers` perception towards IFB products and services, to imply that how deposit mobilization can be improved, how CBE can increase No. of IFB customer’s vis-à-visbetter and high quality banking services. Purposive sampling procedure was employed for this study. The study was conducted on eight purposely selected branches namely: Africa Avenue and A/Amba Michael branches from East Addis district, Addis Ababa and Gulele branches from North Addis district, Alem Bank and AnuarMesgid branches from West Addis district, andGofasefer and DileGebeya branches from South Addis district. From each branch customers included in the sample as respondents, from the total of 162 questionnaires distributed, 142 were returned, out of which 132 were usable. This research used Concurrent mixed methods. Concurrent mixed methods are those in which the researcher converges or merges quantitative and qualitative data in order to provide a comprehensive analysis of the research problem. Quantitative data were analyzed using descriptive statistics tools such as frequency, percentages, means and standard deviation. Binary logistic regression model, which is best, fits the analysis for factors that influence CBE customers to choose IFB products and services were employed. The results of logit model shows that price of service, quality of service, quality of staff, convenient branch location, influence of family and friends and religion were found to have significant relationship with overall perception towards interest free banking. Whereas, awareness of respondents, age, sex, occupation, level of education, income level, marital status, interior atmosphere of branches and provision of IFB service were found to have no significant relationship with overall perception towards interest free banking.