An Empirical Analysis of Customer Choice of Banks in Ghana

Abstract

The deregulation and liberalization of the financial sector as well as the enactment of the new banking law in 1988 has led to increased competition in the Ghanaian banking sector.  Given the dynamic nature of the business environment in Ghana coupled with the fact that customers have become more demanding and highly sophisticated, it has become imperative for financial institutions especially banks to develop strategies and products to attract and retain customers. The current study analyses the factors that bank customers consider important in their choice of banks. The study used primary data from field survey using questionnaire as the instrument. Both descriptive and multivariate statistical methods were used to analyse the data. It was found that the most important factors influencing customer choice of a bank are location of the bank, extension of working hours by the bank, availability of ATM facility, provision of efficient services, the bank being a private one and introduction of customers to the bank by friends and relatives. It is recommended that there should be frequent marketing research by the banks to monitor and evaluate the ever changing customer peculiarities and perspectives in order to develop products or services to meet the current tastes of their customers.

Keywords: Ghana, Choice of Banks, Eigen values, Reliability test.