Journal Press India^®

Author Details ( * ) denotes Corresponding author

The banking environment of today is rapidly changing and the rules of yesterday no longer are applicable today. The corporate and the legal barriers that separate the various banking and investment sectors are less well defined and the cross-over are increasing. In this competitive financial environment of the banking sector, the banks not only competes with each other but also with non-banks and other financial institutions. Banking sector reforms and emerging of foreign and domestic private banks with vast range of new banking products have changed the banking perspective. This diversity could make a positive or negative impact on banks customers to remain loyal to a particular bank or to switch to another bank whichever is more beneficial. The basic objective of this study was to investigate the factors which the credit customers consider while switching to other banks. The researcher identified the factors that have to be given high emphasis by management of the bank in Wolaita Zone while designing the strategies in credit areas like Price, Banks credibility, Quality of services, Bank Proximity, Promotional Activities, Customer Satisfaction and Cost of Switching. The data was gathered through structured questionnaire from credit customers. A causal cross sectional survey was conducted among all the credit customers of bank in Wolaita Zone. A sample of 186 customers were selected by using systematic random sampling technique. Descriptive and Inferential statistics were used for analysis of the data using SPSS version 22 and under Inferential statistics, multiple regression analysis was used to identify the determinants of perceived switching behaviour of credit customers. The results showed that Cost of Switching has the highest impact on credit customer perceived switching behaviour, followed by Price, Promotional activities and customer satisfaction. It was recommended that the banks’ employees of the branches should be considerate towards their customers in releasing and recovery of loans, be polite and responsive to the customers’ requirements and give personalized attention, by putting customer’s best interest at heart, understanding specific needs of customers.

Keywords

Switching Behaviour; Loan Customers; Price; Reputation; Service Quality; Location; Promotion; Customer Satisfaction; Switching Cost

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