EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION IN COMMERCIAL BANK OF ETHIOPIA: THE CASE OF NEKEMTE CITY BRANCHES

Advisor: Abebe Shanko (PhD Candidate) This study investigates the effect of service quality on customer satisfaction with reference to the Commercial Bank of Ethiopia (CBE) branches in Nekemte Town, Oromia Region. The study’s population consists of customers from the CBE branches in Nekemte Town who have used any banking product or service offered by CBE. A sample of 203 customers was selected from those who have used at least one product or service of the bank. both primary and secondary data source was utilized: primary data was collected through structured questionnaires and semi-structured interviews with customers and branch managers, business managers and branch banking business officers respectively whereas secondary data was Obtained from the bank’s annual reports and relevant academic literature.Data was collected using structured questionnaires designed to measure both service quality and customer satisfaction. The research utilized a quantitative approach, collecting data through surveys distributed to customers in the selected CBE branches. The collected data was analysed using SPSS version 29.02 software, employing various statistical tools to elaborate on the study's objectives. The findings were offer valuable insights into how service quality directly affects customer perceptions and satisfaction, helping CBE improve its service offerings and enhance customer loyalty. Reliability was found to have the most significant Effect on customer satisfaction. While Tangibility was found to have a lesser Effect on satisfaction, it is still important. Finally, CBE should encourage continuous research and development in customer service practices. To enhance responsiveness, CBE should streamline its processes to ensure faster response times to inquiries and complaints, both in-person and through digital channels.<br> Keywords: Service Quality, CBE, SERVQUAL, Customer Satisfaction, Bank.