Measuring the perceived service quality and customer satisfaction in Ethiopian Interest-Free Banking Institutions: A case of addis ababa

Interest free banking is a scheme of banking consistent with Shariah principles. Measuring the service quality of it is essential to retain the existed clients and to attract potential customers. The investigation has made to gauge the perceived service quality and consumer loyalty in Ethiopian interest free banking institutions. The information was gathered through surveys circulated to 470 interest free banking clients; and is analyzed by means of descriptive statistics, Wilcoxon Signed Ranks Test, Kruskal Wallis Tests and Mann-Whitney U test, utilizing SPSS version 20 software. The result of the study showed that Ethiopian interest free banking institutions are not providing quality services to their clients. There have been noteworthy contrasts between clients ’perception and desire in all the service quality dimensions, such as compliance, assurance, reliability, tangibility, empathy and responsiveness. Clients are not satisfied with the services. There have been quality holes between clients ’desires and perceptions. The study likewise demonstrated that income level has a significant effect on overall satisfaction of customers; however age, gender, educational qualification, occupation, work segment proprietorship have no significant effects on overall satisfaction. Interest free banking institutions should introduce additional Shariah products; and should recruit Shariah experts to guide it well.