SERVICE QUALITY, CUSTOMER SATISFACTION AND CUSTOMER LOYALTY: AN INVESTIGATION OF SELECTED MICRO FINANCE BANKS IN OSOGBO, NIGERIA

Bank are functioning increasingly under competitive pressures due to rapid technological advancements. However, in order to improve their market positions, many banks direct their strategies towards increasing customer satisfaction and loyalty through improved service quality but low consideration on how service quality affects customer satisfaction and loyalty in microfinance banks prompted this study. This paper thus, investigates the impact of service quality (Tangibility, reliability, assurance, responsiveness and empathy dimensions) on customer satisfaction (CUSSAT) and loyalty (CL) in Microfinance banks in Osogbo. Primary data used were generated from 150 questionnaires administered on customers of the five (5) selected microfinance banks while Ordinary Least Square method of analysis was adopted. The study finds service quality specifically assurance and empathy dimensions have statistical significant influence (p= 0.003 & 0.007 respectively) on customer satisfaction while reliability and tangibility are not significantly related to customer satisfaction (p=0.373 & 0.115 respectively both at 1% significance level. However, customer satisfaction depends and is significantly related to CUSSAT (p= 0.004 @ 1% level of significance). The study thus conclude service quality determines CUSSTA which also determines to a large extent customer loyalty it was recommended that microfinance banks should improve on their service quality variables and train their staff on customer service management with a view to enhance customer satisfaction, loyalty and retention.