THE EFFECT OF SERVICE QUALITY ON CUSTOMER SATSFACTION: THECASE OFADDIS CREDIT AND SAVING INSTITUTON IN ARADA SUB CITY

Abstract

The primary objective of this study is to assess service quality and customer satisfaction on the delivery of service as evidenced from microfinance recipient perspective. Dimensions as adopted in SERVQUAL model (tangibility, assurance, responsiveness, empathy & reliability), have been utilized as measurement constructs to assess the level of service quality and customer satisfaction. A quantitative method has been applied to analyze the data collected from the service recipient in Addis credit and saving specifically at Arada Sub city. Descriptive statistics such as frequency mean and correlation analysis techniques are applied to analyze background information of respondents. The finding on the base of correlation analysis also implies that the relationship between service quality dimensions and customer satisfaction is analyzed and the result shows that service quality dimensions have significant relation with customer satisfaction. The findings also confirms the service quality dimensions have an impact on customers’ satisfaction implying that the higher the quality of service, the higher is the level of customers’ satisfaction. From this finding, it can be summarized that Addis credit and saving at Arada Sub city can improve its service by mostly focusing on service quality dimensions.