Service Quality and Customer Retention: A Study of Microfinance Customers in Kaduna North Local Government Area, Nigeria

Aliyu Mamman, Ismail Kayode Olaoye, Abdulrazaq M. AbdulRahaman


The study examined the effect of aspects of service quality (Tangibility, Reliability, Responsiveness, Assurance and Empathy) on customer retention among customers of Microfinance Banks (MFBs) in Kaduna North Local Government Area. Data was collected by means of a questionnaire administered on the 378 sampled respondents in the study area with a total population of 25,000 customers. Area random sampling technique was used in the selection of sample subjects across the local government area. Descriptive statistics in the form of frequency and percentage was used to analyze the demographic data about the respondents. Inferential statistics in the form of multiple regressions was used to determine the effect of service quality on customer retention in MFBs. The findings of the study reveal that among the aspects of service quality, empathy has the highest effect on customer retention in MFBs. Based on the finding, it is recommended that the various Managements of the MFBs in the study area should pay much attention on aspects of empathy comprising individualized attention, show of care, show of respect, show of love and friendliness to customers by staff of the MFBs.

Keywords: Service Quality, Customer retention and Microfinance banks.

DOI: 10.7176/EJBM/12-14-04

Publication date:May 31st 2020

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