Abstract:
This study explores the impact of interest-free banking (IFB) service quality on customer satisfaction within the Commercial Bank of Ethiopia’s Kolfe District, emphasizing the importance of service excellence in a competitive financial landscape. The research aims to assess how adherence to Islamic banking principles, along with dimensions such as service assurance, responsiveness, reliability, and empathy, influence customer satisfaction and loyalty. To achieve this, a quantitative research design was employed, utilizing structured questionnaires to gather data from a purposive sample of 97 bank customers in the district. The data collection process focused on capturing customers’ perceptions of service quality and satisfaction levels, which were then analyzed using statistical techniques to identify correlations and significant relationships. The findings indicate that customers are dissatisfied with various aspects of service quality, which correlates with low loyalty levels. The results further reveal significant relationships among service quality dimensions and customer satisfaction, underscoring the need for the bank to improve tangible aspects, reliability, responsiveness, assurance, and empathy to better meet customer expectations. The study concludes that enhancing service quality in line with Islamic principles can significantly boost customer satisfaction and loyalty, thereby strengthen the bank’s competitiveness and contribute to the development of Ethiopia’s financial sector. These insights highlight the vital role of service quality improvements in fostering strong customer relationships and ensuring the sustainability of interest-free banking services
