THE EFFECTS OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN THE BANKING INDUSTRY IN TANZANIA

Abstract

This study explore the effect of service quality on customer satisfaction in the banking industry in Tanzania, a case of Nmb bank plc, Arusha City. The specific objective of the study is to measure the level of customer satisfaction among NMB Bank PLC customers in Arusha City. To asses customers perceptions on the effects of service quality dimensions on customer satisfactions and lastly to examine the challenges facing Commercial banks to maximize customer satisfactions. The study used mixed research design where both qualitative and quantitative methodology were used. Sampling was done through probability sampling method. Data were collected using both survey questions and interviews. The analysis data was done through descriptive analysis method, SEM (Specifically on analyzing the relationship of service quality dimension and customer satisfaction and sematic analysis for the challenges facing commercial banks to maximize customer satisfactions. Findings revealed that service quality dimensions including empathy, tangibility, responsiveness, reliability and assurance all positively impact customer satisfaction. This suggest that NMB Bank PLC has the potential to enhance customer satisfaction by strengthening these key services areas each of which significantly influence overall customer experience. The study recommended the frame work for banks to priotize and develop targeted improvement in service delivery as well as key operational challenges and internal factors that impacting customer satisfaction despite the high level of customer satisfaction rate reported in this study