FACTORS AFFECTING CUSTOMERS INTENTION TO USE INTEREST FREE BANKING IN WOLDIA CITY, IN CASE OF COMMERCIAL BANK OF ETHIOPIA

ABSTRACT The main objective of this study was to assess factors affecting customers’ intention to use IFB at CBE, Woldia town focusing on three sample branches. The research design was descriptive and explanatory employing quantitative and qualitative mixed research approach. The target population from the three selected branches was 5152 customers. Among these 371 sample respondents were selected using convenient sampling technique. Questionnaire and document investigation were the main data collection instruments. The primary data collected from sample customers’ through structured questionnaire. The data collected from primary sources has been analyzed by using descriptive statistical analysis. Statistical Package for Social Science version 25 has been applied for regression analysis and Pearson correlation Coefficient analysis. Accordingly, descriptive and inferential statistics were employed to assess the relationships and differences between variables. The dependent variable is customers’ intention to use IFB services. The independent variables include awareness, compatibility relative advantage, perceived trust, Behavioral Control and Subjective Norm. Accordingly, the results from Pearson correlation analysis clearly shows that a strong positive relationship was found between compatibility, awareness and relative advantage with customers’ intention to use IFB services, which are statistically significant at 88.% confidence level. The second is Awareness, Relative Advantage, Compatibility, Perceived Trust, Behavioral Control and Subjective Norm increased by one unit; it increases by 0.336, 0.162, 0.228, 0.186, 0.134 and 0.135 respectively on Customer intention. Predictor of customers’ intention to use IFB services and products at CBE, Woldia town when compared with the other explanatory variables. Finally, some recommendations are provided especially for CBE should conduct aggressive promotion and marketing campaign to create awareness among customers about the services to enhance customer’s intention to use interest free banking services and products.