Customer Satisfaction and Financial Performance in Selected Banking Institutions in Kigali, Rwanda

ABSTRACT 

This research study is on customer satisfaction and financial performance in banking institutions of Kigali. The general objective was to determine the relationship between customer satisfaction (independent variable) and financial performance (dependent variable). The survey research design was used, specifically, the descriptive and correlational techniques. A sample of 120 respondents was derived from a population of 140. Data are presented and analyzed using statistical techniques, specifically, the frequency, percentage, mean, the PEARSON correlation, and the regression analysis. The findings of the study revealed that there was a significant relationship between customer satisfaction and financial performance; with the value of significance of (sign. =0.013) both in Fina Bank and Urwego Opportunity Bank; and the relationship of (r=O.593) in Fna Bank, and (r=0.6) in Urwego Opportunity Bank. This is in the line with the findings of Coldwell (2001) whose findings revealed that: 1) A Totally Satisfied Customer contributes 2.6 times as much revenue to a company as a Somewhat Satisfied Customer. 2) A Totally Satisfied Customer contributes 17 times as much revenue as a Somewhat Dissatisfied Customer. 3) A Totally Dissatisfied Customer decreases revenue at a rate equal to 1.8 times what a Totally Satisfied Customer contributes to a business”. Thus, the researcher concluded that the null hypothesis was rejected. Thus it was recommended that business organizations should always strive to ensure that their customers are very satisfied.

TABLE OF CONTENTS

DECLARATION A

DECLARATION B ii

APPROVAL SHEET IN

DEDICATION iv

ACKNOWLEGEMENT v

ABSTRACT vi

TABLE OF CONTENTS vii

LIST OF TABLES ix

Chapter Page

ONE THE PROBLEM AND ITS SCOPE 1

Background of the Study 1

Statement of the Problem 2

Purpose of the study 3

Research Objectives 3

Research Questions 4

Research hypothesis 4

Scope of the study 4

Significance of the study 5

Operational Definitions of Key Terms 5

TWO REVIEW OF RELATED LITERATURE 6

Concepts, Opinions, Ideas from Authors! Experts 6

Theoretical Perspectives 12

Related Studies 18

THREE METHODOLOGY 23

Research Design 23

Research Population 23

Sample Size 23

Sampling Procedure 24

Research Instrument 24

Validity and Reliability of the Instrument 24

Data Gathering Procedures 25

Data Analysis 26

Ethical Considerations 26

Limitations of the study 27

FOUR PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 28

FINDINGS, CONCLUSION AND RECOMMENDATIONS 36

FINDINGS 36

CONCLUSION 38

RECOMMENDATIONS 39

References 40

APPENDICES 43

APPENDIX I TRANSMITTAL LETTER 43

APPENDIX II AUTHORIZATION TO CARRY OUT RESEARCH AT

FINA BANK 44

APPENDIX III AUTHORIZATION TO CARRY OUT RESEARCH AT UOB 45

APPENDIX IV CLEARANCE FROM ETHICS COMMITTEE 46

APPENDIX V INFORMED CONSENT 47

APPENDIX VI RESEARCH INSTRUMENTS 48

APPENDIX VII RESEARCHER’S CURRICULUM VITAE 51