Determinants of Customer Bank Selection Decision In East Arsi Zone Robe Town

Taste and preferences keep on changing with time and what seem palatable and efficacious yesterday may not be applicable in the context of today. Thus in light of this dynamism, the current study has tried to examine the determinants of customer bank selection in East Arsi Zone Robe Town. To achieve this objectives the researcher collected primary data through questionnaire from banks" customer using sample of 384 respondents. The customer perceptions of banking services were described using descriptive analysis while Spearman's rho were used to test correlation between personal characteristic and customer bank selection decision ,relative effect of determinants has measured and explained through binary regression analysis. The study has revealed that the service charge and interest on loan, void of non-collateral lending owing to lack of citizen"s comprehensive data base, absence updating and reviewing its finical factor, gaps in notifying changes in interest rates , terms and conditions in advance as major finance related constraint. Among other factor lack of attention to customer"s specific need, existence of limited Islamic banking service, inadequate number of branch, ATM failure, transaction mistake and inaccessible network and weakness of marketing and promotional activities create dissatisfaction among customer in the study areas. The preference of technology like mobile banking has been considered as a significant determinant of bank selection among the youngster. With regard social factor recommendation by friends/relatives, family member, knowing bank management, language of communication and ethnic affiliation has positively influenced customer their bank selection. The feasible adjustment and advance notification of service charge, interest on loan and financial condition; coupled with creating favorable terms to provide non-collateral lending will positively impacted on the customer bank selection decision. The study will also recommend provision of better customer oriented service, expansion of Islamic banking service, increment in a number of banks branch, fixing of ATM and transaction related issue, enhancing mobile banking and digital marketing service in particular to attract youngsters, paying due attention social related factor like offering of multi-lingual bank service to positively impact on the customer bank selection decision.