Banking Services and Customers' Satisfaction in The Rwandan Banking Industry: A Case of Banque Popular of Rwanda (Bpr) Limited

ABSTRACT The purpose of this study was to assess the level of ebanking services usage and customers' satisfaction in the Rwandan Banking Industry in Bank Populaire of Rwanda Limited. The main objectives of the study were to assess the level of ebanking services usage by BPR customers; to determine BPR customers' view of their overall e-service quality with ATM and Mobile banking services and to analyze the customer satisfaction with the existing ebanking services in terms ofloyalty and retention. The researcher used exploratory, descriptive, cross-sectional and correlational studies. Both qualitative and quantitative techniques were applied. A sample size of 400 respondents was selected. Totally, 368 questionnaires were considered for this study, representing a response rate of92%. Usable data were entered into SPSS for analysis. The findings of the study revealed that BPR Ltd customers are fully aware of ebanking services offered by the Bank (97.8%) and most of the respondents indicated that they have a year of experience with ebanking services. The findings showed that customers enjoying electronic banking services are still not very satisfied with their quality and efficiency although a bigger percentage of the customers are satisfied. The satisfaction within all e-service quality attributes of ATM and Mobile banking is high with 67.4% and 69.6% respectively. Although a bigger percentage of the customers are satisfied (63%), the results analysis indicated that an important proportion of customers were neither dissatisfied nor satisfied with quality attributes, meaning that BPR should improve its e-service quality to meet customers' expectations or exceed them. Based on the research findings, it was recommended that the service quality should be improved in BPR Limited, the reduction of service charges, increase in the number of ATMs as well as provision of deposit ATMs. 

TABLE OF CONTENTS

DECLARATION ••...•.•••••••••••..•.•••.•••..••.•...•.•.•.••.•••.••.••.•.•.••..•...•.•.•••••••..••.•..•.••..•.•••.••..••.••.•••.••..•••..••..•... ii

APPROV AL ••••••••••.•.••••.••••••••..•.•.••.••••••.•...•.••.••.•..••••••.•••••..•.••...•...••.•••••..•.••...•.••....••••••••••..•.•...•..•.•..••••• iii

DEDICATION ...................................................................................................................................... iv

ACKNOWLEDGEMENT ..................................................................................................................... v

TABLE OF CONTENTS ...................................................................................................................... vi

LIST OF TABLES ................................................................................................................................. x

LIST OF FIGURES ...••..............•.....••..•........................•......................•.•.•.......................•...•................ xi

LIST OF APPENDICES ••••.•••••••••••••••.••..•••.••.•••••••••.•••••••••.••••••••••••.••••••.••••••••••••••••••.••••••.•••••..•••••..•.••• xii

LIST OF ACCRONYMS/ABBREVIATIONS ••••••••.••.•.•.••.••.•.•••••••••••••••.•.••.•.••••.••.•••.••••••••.•....•••..•••.• xiii

ABSTRACT ......................................................................................................................................... xv

CHAPTER O NE: •.•..••.••.••.•..•.•.•••••.••.•..•.••..••...••.•.••••.••.••••••.••.••.•...•..•.•••...•••.•.••••••.•.••..••.••.•...••.•••.••••.•...• 1

INTRODUCTION ................................................................................................................................. 1

1. 0 Introduction ....................................................................................................................... 1

1.1 Background of the study .................................................................................................... 1

1.1.1 Historical Perspective ........................................................................................................... 1

1.1.2 Theoretical Perspective ........................................................................................................ 3

l.1.3 Conceptual Perspective ............................................................................................................ 4

1.1.3 Contexiual Perspective ......................................................................................................... 5

1.2 Statement of the Problem ................................................................................................... 6

1.3 Purpose of the study ........................................................................................................... 7

1.4 Objectives of the study ....................................................................................................... 7

1.5 Research questions ............................................................................................................. 7

1.6 Scope of the study .............................................................................................................. 8

1.7 Significance of the study .................................................................................................... 8

1.8 Conceptual framework ....................................................................................................... 9

vi

CHAPTER TW 0: ................................................................................................................................ 10

LITERATURE REVIE'W .................................................................................................................... 10

2.1 Introduction ..................................................................................................................... l 0

2.2. Level of E-Banking services Usage ................................................................................. ] 0

2.2. l E-commerce .......................................................................................................................... 10

2.2.2 From E-commerce to E-banking ............................................................................................ 11

2.2.3. Evolution ofE-banking ......................................................................................................... 12

2.2.4. E-banking tools .................................................................................................................... 13

2.2.5 Future of e-banking ............................................................................................................... 15

2.2.6 Reasons for Implementing e-Banking .................................................................................... 16

2.2. 7 Benefits of e-banking ............................................................................................................ 17

2.3 E-Service quality ............................................................................................................. 19

2.3. l Introduction ........................................................................................................................... 19

2.3.2 Traditional service quality dimensions ................................................................................... 19

2.3.3 E- Service quality .................................................................................................................. 20

2.4 Customer Satisfaction ...................................................................................................... 23

2.4.1 Outcomes of Customer Satisfactio11 ....................................................................................... 24

2.4.1. lCustomer Loyalty ................................................................................................................ 24

2.4.1.2 Customer retention ............................................................................................................. 25

2.4.2 Customer Satisfaction, Cmrromer Loyalty and Retention ........................................................ 26

2.4.3 Customer satisfaction and service quality ............................................................................... 28

2.5 Rwandan banking industry ............................................................................................... 29

2.5. l E-bauking in Rwanda ............................................................................................................ 29

2.5.1.1 Card based payments system .............................................................................................. 30

2.5.1.2 Electronic payments and money transfer services ................................................................ 31

2.5.1.3 Visa Partner.ship ................................................................................................................. 31

2.5.2 BPR E-cl1mmels .................................................................................................................... 32

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CHAPTER THRE: .............................................................................................................................. 34

RESEARCH METHODOLOGY ........................................................................................................ 34

3.0 Introduction ..................................................................................................................... 34

3.1 Research design ............................................................................................................... 34

3.2 Population and Sampling ................................................................................................. 34

3.2.l Target population .................................................................................................................. 35

3.2.2 Sample Size ........................................................................................................................... 35

3.2.3 Sampling Teclmiques ............................................................................................................ 35

3.3 Data collection ................................................................................................................. 35

3.3.1 lnstrmnentation ..................................................................................................................... 36

3.3.2 Research procedure ............................................................................................................... 36

3.4. Quality Control ............................................................................................................... 37

3.4. lValidity .................................................................................................................................. 37

3.4.2 Reliability ............................................................................................................................. 37

3.5 Data Analysis .................................................................................................................. 38

3.6 Ethical Considerations ..................................................................................................... 38

3.6.1 Privacy and Confidentiality ................................................................................................... 38

3.6.2 Anonymity ............................................................................................................................ 38

3.6.3 Researcher•s Responsibility ................................................................................................... 39

3.6.4 Informed Consent .................................................................................................................. 39

3.7 Limitations ...................................................................................................................... 39

CHAPTER FOUR: .............................................................................................................................. 40

DATA ANALYSIS AND PRESENTATION OF FINDINGS ............................................................ .40

4. 0 Introduction .................................................................................................................... .40

4.1 Profile of the respondents ................................................................................................. 40

4.2.2 Respondent' s Gender ............................................................................................................ 41

4.2 Customers• view of their overall e-service quality with A 1M banking ............................. 44