THE EFFECTS OF ISLAMIC BANKING ADOPTION ON CUSTOMER SATISFACTION IN ADDIS ABABA THE CASE OF ZAMZAM BANK

Abstract

The study examined the relationship between Islamic Banking Adoption and Customer Satisfaction in ZamZam Bank of Addis Ababa. The researcher used qualitative and quantitative research approaches with an explanatory and descriptive research design to carry out the investigation. In order to obtain the required data, primary data gathering methods (questionnaires and interviews) were employed. From sample respondents 351 respondents filled up the questionnaire fully and descriptive and inferential statistics were used for analysis with the help of statistical package for social science (SPSS) version 21. The research finding shows adoption of Islamic banking had paramount significance for ZamZam Bank customers. Specifically, risk attitude and religiosity had statistically strong significant effects on customer satisfaction with higher beta value of 0.589 and 0.414 respectively. Additionally, Bank reputation had statistically moderate and significant effects on customer satisfaction and also Islamic financial Literacy had statistically positive and insignificant effects on customer satisfaction. The qualitative finding supports the quantitative one and the bank developed better financial systems and its services quality and its practices were found in better position. Also, bank customer handling capability was exciting but absence of knowledge about Islamic finances and products and lack of branches limited the implementation of Islamic finance and its principle. As a result of this, the bank established an awareness creation mechanism and created awareness to facilitate Islamic banking principles implementation and open more branches to reach mass customers.