Influence of Service Quality on Customer Switching Behaviour in Commercial Banks of Tanzania: Evidence from Selected Commercial Banks in Dar es Salaam

Authors

  • Seule Nzowa Institute of Rural Development Planning https://orcid.org/0000-0002-4022-5883
  • Nasra Kara Open University of Tanzania
  • Bahati Mbilinyi Open University of Tanzania

Keywords:

service quality, switching behaviour, reliability, assurance, tangibility, responsiveness and empathy

Abstract

Intense competition causes Tanzanian banks to experience the threat of customer switching. Customers are sensitive to quality in their access to and use of banking services; hence, they are prone to switching to other banks since the services offered are similar. This study assesses how service quality influences customer switching behaviour among commercial banks in Dar es Salaam. The data constitute 400 randomly sampled customers at NBC Bank Ltd, TPB Bank Plc and NMB Bank Plc, collected using a structured questionnaire and analysed using multiple regression analysis. The main findings are that customers’ switching behaviour is significantly influenced by service reliability, assurance, tangibility and empathy, whereas responsiveness was found to be insignificant. These findings may help policymakers and commercial bank institutions in understanding the dimensions of service quality that may influence customer switching behaviour for the successful enhancement of quality services of the banks. 

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Author Biographies

Seule Nzowa, Institute of Rural Development Planning

Department of Finance and Management Studies

Nasra Kara, Open University of Tanzania

Department of Leadership and Governance

Bahati Mbilinyi, Open University of Tanzania

Department of Leadership and Governance

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Published

2022-07-20

How to Cite

Nzowa, S., Kara, N., & Mbilinyi, B. (2022). Influence of Service Quality on Customer Switching Behaviour in Commercial Banks of Tanzania: Evidence from Selected Commercial Banks in Dar es Salaam. Tanzanian Economic Review, 12(1), 35-46. Retrieved from https://ter.udsm.ac.tz/index.php/ter/article/view/95