Determinants Of Bank Selection Decision By Customers Of Commercial Banks In Ethiopia: Study On Commercial Banks In Merkato Area

Abstract

This study made its focus on identifying the key factors affecting on customers of banking industry to choose one bank over the other, and it is conducted in Addis Ababa on ten selected banks operating around Mercato Area. Data were collected using self-administered questionnaires to a sample of 384 of the selected Banks customers. The response rate of respondent was good (97.4%) which is valid on importance of seven selection criteria. Mean analysis was applied to rank the most important determinants of bank selection, and the collected data were analyzed through SPSS version (20) through descriptive and inferential statistical tools such as mean, percentage, ANOVA, correlation and multiple linear regressions were used to analyze collected data. The result regression model of the study shows that the all independent variables explain 67% variability on bank selection decision. The findings revealed that; service quality and availability factors, corporate citizenship of banks factors, technology and digital banking factors, promotion factors, financial performance factors, and image and reputation factors have a significant and positive effect on bank selection decision and in short all independent variables included in this study were sufficiently explained the dependent variable implying that the management of banks should give especial emphasis to the quality they offer to their customers, the skillfulness of their staff ,make their technology and digital banking channels timely and efficient ,and by the same level they should give focus at working on community based activities through public relations.