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RESOLVING CUSTOMER COMPLAINTS AND CORPORATE IMAGE OF
FINANCIAL INSTITUTIONS IN UGANDA
A CASE STUDY OF EQUITY BANK UGANDA LIMITED (KATWE BRANCH)
BY
ATWONGYEIRE ROGERS
RE.NO: 07/U/4735/EXT
SUPERVISED
BY
MR KINTU ISMA
APROJECT REPORT SUBMITTEDTO TO THE SCHOOL OF DISTANCE
AND LIFE LONG LEARNING IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE A WARD OF BACHELOR OF
COMMERCE
MAKERERE UNIVERSITY
MAY 2011
i
DECLARATION
I ATWONGYEIRE ROGERS hereby declare that this study was carried out for academic
purpose and it has never been presented for any academic award in any University or institution.
Where other people’s work was used, acknowledgement has been fully done.
Signature………………………………………
ATWONGYEIRE ROGERS
07/U/4735/EXT
Date……………………………………………
i
APPROVAL
This research under the title “resolving customer complaints and corporate image of financial
institutions in Uganda’ case study Equity bank Uganda .ltd Katwe Branch” by ATWONGYEIRE
ROGERS, is presented for examination with my approval as university supervisor.
Signature………………………………… Date………………………………………
MR KINTU ISMAIL.
(Supervisor)
ii
DEDICATION
I dedicate this work to my beloved parents Mr and Mrs Patrick Bangirana, my Brothers Bruce,
Ronald and Patson, and also sisters Patience and Peace and lastly Itungo Medius.
iii
ACKNOWLEDGEMENT
Thanks goes to the almighty God who has given me power, strength and wisdom towards
accomplishment and writing of this report.
I would wish to also thank my Supervisor Mr Kintu Ismail for his parental guidance,
encouragement and advice he rendered to me towards writing this report. Keep up the spirit and
may the almighty God bless you abundantly.
I would like to also thank the management and customers of Equity Bank for their co-operation
and support during the time of preparation of this report.
Am also grateful to my father Mr. Patrick Bangirana My mom Mrs Vailot Bangirana Nalongo
my brother Patson, Bruce and Ronald My Aunties Ephy Alice and Uncles, Isaac, Phillip and
Jefrey without whose support financially, morally, spiritually the completion of this work would
be a myth.
Special thanks to Ssali Ibrahim, Joy Abalinabyo, Duncan Aine, Itungo Medius Tumwesigye
Edison, Julius Sserwanja the entire BIMUSA family for their support, time, talent, materials and
patience along the Joys and agonies that would go with the preparation of this report and the
entire completion of my degree. The value of your contribution remains indebted to me.
And to all relatives, friends and Classmates for their prayers, guidance and support to the report
writing.
iv
TABLE OF CONTENTS
DECLARATION..............................................................................................................................i
APPROVAL....................................................................................................................................ii
DEDICATION...............................................................................................................................iii
ACKNOWLEDGEMENT..............................................................................................................iv
TABLE OF CNTENTS...................................................................................................................v
LISTS OF FIGURES......................................................................................................................ix
LIST OF TABLES...........................................................................................................................x
LIST OF ACRONYMS.................................................................................................................xii
ABSTRACT.................................................................................................................................xiii
CHAPTER ONE............................................................................................................................1
1.0 INTRODUCTION.....................................................................................................................1
1.1 BACKGROUND TO THE STUDY..........................................................................................1
1.2 STATEMENT OF THE PROBLEM.........................................................................................3
1.3 PURPOSE OF THE STUDY.....................................................................................................4
1.4 OBJECTIVES OF THE STUDY...............................................................................................4
1.5 RESEARCH QUESTIONS.......................................................................................................4
1.6 SCOPE OF THE STUDY..........................................................................................................4
1.6.0 Geographical Scope................................................................................................................4
1.6.1 Subject Scope..........................................................................................................................5
1.6.2 Time Frame.............................................................................................................................5
1.7 SIGNIFICANCE OF THE STUDY..........................................................................................5
CHAPTER TWO...........................................................................................................................6
LITERATURE REVIEW.............................................................................................................6
2.0 Introduction................................................................................................................................6
2.1 CUSTOMER COMPLAINTS IN BANKS...............................................................................6
2.1.1 COMPLAINT HANDLING STRATEGIES IN BANKS......................................................8
2.1.2 EVIDENCE OF CUSTOMER SATISFACTION WITH COMPLAINTS HANDLING....10
2.2 CORPORATE IMAGE...........................................................................................................11
2.3 RELATIONSHIP BETWEEN CUSTOMER COMPLAINTS AND CORPORATE IMAGE.
.......................................................................................................................................................12
2.4 Conclusion...............................................................................................................................13v
CHAPTER THREE.....................................................................................................................14
RESEARCH METHODOLOGY...............................................................................................14
3.0 INTRODUCTION...................................................................................................................14
3.1 AREA OF STUDY..................................................................................................................14
3.2 RESEARCH DESIGN.............................................................................................................14
3.3 POPULATION........................................................................................................................14
3.4 SAMPLE SIZE........................................................................................................................14
3.5 SAMPLING DESIGN AND PROCEDURES.........................................................................14
3.6 DATA SOURCES...................................................................................................................15
3.7 DATA COLLECTION PROCEDURES AND INSTRUMENTS..........................................15
3.8 DATA PROCESSING, SUMMARY AND PRESENTATION..............................................15
3.8.0 Coding...................................................................................................................................15
3.8.1 Editing...................................................................................................................................15
3.8.2 Tabulation.............................................................................................................................15
3.9 DATA ANALYSIS.................................................................................................................16
CHAPTER FOUR.......................................................................................................................17
PRESENTATION AND ANLYSIS............................................................................................17
4.0 Introduction..............................................................................................................................17
1 Findings on gender of respondents.............................................................................................18
4.1.0 SECTION B OBJECTIVE 1: TO ESTABLISH THE MAJOR COMPLAINTS BY THE
CUSTOMERS OF EQUITY BANK UGANDA LTD..................................................................20
4.1.2. Findings on whether their ATM is always on at the branch................................................21
4.1.3 Findings on whether the bank charges high interest rates on staff loans..............................21
4.1.4 Findings on whether getting a loan from equity bank takes a lot time procedures..............22
4.1.5 Findings on the bank understands when I can not meet my repayments..............................23
4.1.6 Findings on whether there are long queues in the banking hall...........................................23
4.2.0 SECTION B OBJECTIVE 2: TO IDENTIFY THE MECHANISMS USED BY THE
BANK IN RESOLVING CUSTOMER COMPLAINTS..............................................................24
4.2.1 Findings on whether there is enough customer care staff.....................................................24
4.2.2 Findings on whether the bank pays staff well......................................................................25
4.2.3 Findings on whether the bank trains its staff more often......................................................25
4.2.4 Findings on whether the bank holds joint meetings with customers who have complaints. 26
4.2.5 Findings on whether the bank carries out surveys on customer complaints.........................26
vi
4.2.6 Findings on whether the bank has well displayed suggestion boxes....................................27
4.2.7 Findings on whether the bank handles staff conflicts amicably...........................................27
4.3.0 SECTION B OBJECTIVE 3 TO EXAMINE THE RELATIONSHIP BETWEEN
CUSTOMER COMPLAINT SETTLEMENT AND CORPORATE IMAGE OF FINANCIAL
INSTITUTIONS............................................................................................................................28
4.3.1 Findings on whether staffs have accounts in other banks.....................................................28
4.3.2 Findings on the bank has a good remuneration package......................................................28
4.3.3 Findings on whether the bank participates in community work...........................................29
4.3.4 Findings on whether the bank strives hard to keep its reputation by improving its services.
.......................................................................................................................................................29
4.3.5 Findings on gender fro respondents......................................................................................30
4.3.6 Findings on the period customers had had their banking with equity bank.........................30
4.3.7 Findings on how the customers got to know about Equity bank..........................................31
4.3.8 Findings on education levels of equity bank customers.......................................................31
4.3.9 Findings on whether Equity bank charges high interest rate................................................32
4.3.10 Findings on whether there are unfavorable loan terms and conditions..............................32
4.3.11 Findings on whether customers are not given grace period...............................................33
4.3.12 Findings on whether there was poor customer care in the bank.........................................34
4.3.13 Findings on whether getting a loan takes a lot of time and procedures..............................34
4.3.14 Findings on whether the bank understands when a customer can’t meet his repayments..35
4.3.15 Findings on whether Equity bank makes un authorized transactions on customers accounts
.......................................................................................................................................................35
4.3.16 Findings on whether the bank requires saving with them in order to access a loan...........36
4.3.17 Findings on whether equity bank has unfriendly staff........................................................36
4.3.18 Findings on whether the bank’s loan processing is costly..................................................37
4.3.19Findings on whether the bank has untrustworthy staff........................................................37
4.4.0 SECTION B OBJECTIVE 2: TO ESTABLISH THE MECHANISMS USED IN
HANDLING CUSTOMER COMPLAINTS.................................................................................38
4.4.1 Findings on whether the complaint handling mechanism is good........................................38
4.4.2 Findings on whether the bank pays damages infringed on customers..................................38
4.4.3 Findings on whether the bank sends apology letters to customers.......................................39
4.4.4 Findings on whether the bank holds joint meetings with customers....................................40
4.4.5 Findings on whether the bank carries out surveys on customer complaints.........................40
vii
4.4.6 Findings on whether the bank has well displayed suggestion boxes....................................41
4.4.7 Findings on whether the bank carries out surveys on customer complaints.........................41
4.5.0 SECTION B OBJEECTIVE 3: TO EXAMINE THE RELATIONSHIP BETWEEN
CUSTOMER COMPLAINT SETTLEMENT AND CORPORATE IMAGE OF FINANCIAL
INSTITUTIONS IN UGANDA....................................................................................................42
4.5.1 Findings on whether people talk well about Equity bank.....................................................42
4.5.2 Findings on whether a customer would recommend a friend to open up an account with
equity bank.....................................................................................................................................43
4.5.3 Findings on whether the bank has good products for customers..........................................44
4.5.4 Findings on whether the bank has many branches all over the country...............................44
5.5.5 THE RELATIONSHIP BETWEEN CUSTOMER COMPLAINT SETTLEMENT AND
CORPORATE IMAGE OF FINANCIAL INSTITUTIONS........................................................45
CHAPTER FIVE.........................................................................................................................47
SUMMARY OF FINDINGS, CONCLUSIONS, RECOMMENDATION AND AREAS OF
FURTHER RESEARCH.............................................................................................................47
5.0 INTRODUCTION...................................................................................................................47
5.1 DISCUSSION OF THE FINDINGS.......................................................................................47
5.2.0 Conclusions...........................................................................................................................48
5.2.1 Objective 1: To establish the major complaints by the customers of Equity bank Uganda
Ltd..................................................................................................................................................48
5.2.2 Objective 2: To identify the mechanisms used by Equity bank Uganda Ltd in handling
customer complaints......................................................................................................................48
5.2.3 Objective 3: To examine the relationship between customer complaints settlement and
corporate Image of financial institution in Uganda.......................................................................48
5.3.0 RECOMMENDATIONS......................................................................................................49
QUESTIONAIRE FOR CUSTOMERS........................................................................................52
APPENDIX II................................................................................................................................54
QUESTIONAIRE FOR STAFF....................................................................................................54
viii
LISTS OF FIGURES
Figure 1:A Pie chart showing Gender of respondents...................................................................18
Figure 2: showing the level of education of staff in equity bank..................................................19
Figure 3:showing rates on interest on staff loans..........................................................................22
ix
LIST OF TABLES
Table 1: Showing response of all the respondents........................................................................17
Table 2: Showing the Gender of the respondents.........................................................................17
Table 3: Showing the time staff have worked with equity bank...................................................18
Table 4. Showing education levels of Equity bank Staff..............................................................19
Table 5:Showing departments found in equity bank....................................................................19
Table 6:Showing whether customers complain about the bank’s services...................................20
Table 7:Showing whether the ATM is always on the their branch...............................................20
Table 8: Showing whether there is high interest rate for staff loans............................................21
Table 9:Showing whether getting a loan from the bank takes a lot of time and procedures........22
Table 10: Showing whether the bank understands when a customer cannot meet his or her
repayments.....................................................................................................................................23
Table 11: Showing whether there are long queues in the banking halls.......................................23
Table 12: Showing whether the bank has enough customer care staff.........................................24
Table 13: Showing staff responses on whether the bank pays them well.....................................24
Table 14: Showing findings on whether the bank trains its staff more often...............................25
Table 15: Showing whether the bank holds joint meetings with clients who have complaints....25
Table 16: Showing whether the bank carries out surveys on customer complaints.....................26
Table 17:Showing whether the bank has well displayed suggestion boxes..................................27
Table 18:Showing whether the bank handles staff conflicts amicably.........................................27
Table 19: Showing whether Staff has accounts in other banks....................................................28
Table 20: Showing whether the bank has a good a remuneration package..................................28
Table 21:Showing whether the bank participates in community work.........................................29
Table 22:Whether the showing the bank strives hard to keep its reputation by improving its
services..........................................................................................................................................29
Table 23 :Showing gender for respondents...................................................................................30
Table 24: Showing the period the customers has been with the bank..........................................30
Table 25: Showing how the customers got to know about equity bank.......................................31
Table 26: Showing education levels of equity bank’s customers.................................................31
Table 27: Showing whether equity charges High interest rate....................................................32
Table 28: Showing whether there are Unfavorable loan terms and conditions............................32
x
Table 29:Showing whether customers are given no grace period................................................33
Table 30:Showing whether there is poor customer care...............................................................33
Table 31: Showing whether Getting a loan takes a lot of time and procedures............................34
Table 32:Showing whether the bank understands when a customer cannot meet his or her
repayments.....................................................................................................................................34
Table 33:Showing whether they make unauthorized transactions................................................35
Table 34:Showing whether the bank require savings with them to access a loan.......................35
Table 35: Showing whether the bank has unfriendly staff............................................................36
Table 36: Showing whether Loan processing is costly at equity bank.........................................37
Table 37: Showing whether the bank has Untrustworthy staff.....................................................37
Table 38: Showing whether the complaint handling mechanism is good....................................38
Table 39:Showing whether bank pays damages infringed on customers.....................................38
Table 40: Showing whether the bank sends apology letters to customers....................................39
Table 41:Showing whether the bank holds joint meetings with customers..................................39
.Table 42: Showing whether the bank carries out surveys on customer complaints....................40
Table 43:Showing whether the bank has well displayed suggestion boxes..................................40
Table 44: Showing whether the bank has well displayed complaint books..................................41
Table 45: Showing whether People talk fairly well about the bank.............................................42
Table 46:Showing whether a customer would recommend a friend to open up an account in
equity bank.....................................................................................................................................43
Table 47:Showing whether the bank has good products for customers........................................43
Table 48: Showing whether the bank has many braches all over the country.............................44
Table 49:Examining the relationship between customer complaints settlement and...................45
Table 50:Showing the relationship between customer complaints settlement and corporate Image
Using spearman’s rank of correlation............................................................................................46
xi
LIST OF ACRONYMS
ATM-Automatic Teller Machine
FSA - Financial Services Authority
ICICI - Industrial Credit and Investment Corporation of India
MDI- Microfinance Deposit Taking institutions
NGO- Non-governmental Organization
RBI- Reserve Bank of India
SMAS - Scottish Manufacturing Advisory Service
UMU –Uganda Microfinance Union
UML-Uganda Micro Finance Limited
xii
ABSTRACT
This study was mainly carried out on Resolving customer complaints and corporate Image of
financial institutions in Uganda Case Equity Bank Uganda Ltd Katwe branch.
The objectives of the study were specifically, to establish the major complaints by the customers
of Equity Bank Uganda Ltd, the strategies used by Equity Bank Uganda Ltd in handling
customer complaints and the relationship between customer complaints settlement and corporate
Image of financial Institutions in Uganda.
The researcher employed both qualitative and quantitative approached to data analysis. a sample
of 64 respondents was used. Respondents are both randomly and purposively selected from all
the starters of customers, Bank staff and management.
Findings of the study indicated that though the bank had friendly staff, well displayed suggestion
boxes and complaints books, but these seemed to be of no use as many complaints were still
raised by customers meaning customer complaints were not given due attention.
The study concluded that though the bank has well displayed suggestion boxes and complaints
books in the banking hall. These were not of use to the bank since many complaints were found
unanswered as it was found that there were many complaints from customers about the bank
It was also concluded that unless customer complaints are brought to right including staffs then
the customer and staff retention will remain a myth and this will affect the corporate image of the
bank as the study found out that resolving customer complaints contributes 56% of corporate
image of the institution and the rest by other factors which is a strong relationship.
The study recommended that a 24 hour feedback should be maintained among the stakeholders
and this should include not only customers but also internal employees. Staff should be paid well
and trained so as to have a satisfied mind which will motivate them to deliver to their
expectations.
xiii
CHAPTER ONE
1.0 INTRODUCTION This chapter is to present the background of the study, statement of the problem, the purpose of
the study and its objectives, the research questions, scope of the study ands its significance.
1.1 BACKGROUND TO THE STUDY
Equity Bank Uganda Limited started operations in 1997 as Uganda Microfinance Union (UMU),
an NGO at the time providing primarily affordable loans to its customers. UMU then acquired
an MDI license in 2005 and transformed into Uganda Microfinance Limited (UML) a
microfinance deposit taking institution regulated by the Central Bank and with expanded
shareholding from international investors. UML then became the leading micro finance
institution in Uganda, with continued expansion that led to 31 branches and 16 contact offices
countrywide.
In April, 2008 UML successively merged with Equity Bank Limited of Kenya to become a fully
fledged commercial bank offering a variety of financial services. The micro enterprise sector has
hitherto remained the main target market of the bank.
Customer complaints are defined as situations that express dissatisfaction by customers, whether
justified or not (Koetler 2000). Repeated customer complaints can spoil the institution’s image
which in the long run can lead to the collapse of the institution. With this customer complaints
need to be taken serious and immediately attended to. When customer complaints are well
managed the results is customer loyalty. Loyal customers are continuous business partners; they
resist cross bank temptations and are known to voluntarily testify in favor of the bank by word or
otherwise (Shankar, 2007). Customer loyalty on the other hand defines situations in which the
numbers of individuals (clients) staying with a business over a specified time. Customer loyalty
is said to be a hallmark of a well managed complaints handling system which translates into
organizational profitability. The way the bank handles customer complaints can determine
whether it has a competitive advantage in the market or not. No company can avoid complaints.
Customer Complaints are of great importance to an institution as they can be used to identify
flaws in systems and help rectify the causes.
Customer complaints vary with different institutions, but the central point is that customer
complaints signal customer dissatisfaction
1
A corporate image is the perception that the general public holds about a particular business.
Many companies invest a great deal of time and other resources in an effort to influence the
opinion that consumers hold about the products offered by the business, as well as the business
itself. This process of cultivating positive public relations extends to not only interaction with
consumers, but also ongoing interaction with the media, labor unions, industrial associations, and
other entities that have a direct and indirect impact on public opinion. Many firms focus little
attention on their corporate image until it has been severely damaged. Often, this recognition
comes too late to remedy the situation.
Shankar (2007) asserts that in India the quality of service in Indian banks has deteriorated badly
since June 2006. Customers have suddenly become more discerning. According to banking
regulator, the Reserve bank of India (RBI), the number of customer complaints increased by over
500% to 34,499 in 12 months between July 2006 and June 2007. In the previous 12 months, the
number of complaints was 5,772.
In Uganda, customer complaints in the banking industry show that the industry might guilt of
offering much less to their customer expectations in terms of customer care services. With a fully
fledged liberal economy where competition for the best services should be the norm, the banking
industry in Uganda seems not to be offering the best customer care services to their clientele.
According to Kayizzi (2008), the Bank of Uganda Governor pointed out complaints from the
public about staff collusion to defraud customers but the offending banks have kept quiet.
This report addresses sector performance in customer complaints and building corporate image,
focusing on the Banking industry using Equity Bank ltd as a case study. Research on the sector
worldwide reveals that customer complaints are abundant in the use of Automated Teller
Machines (ATM), opening of accounts, long queues, collusion of bank staff with unscrupulous
elements to defraud individual accounts, unauthorized account seizures and freezes as well as
cumbersome documentation and unreceptive bank staff.
Equity bank Uganda Ltd has been in operation for about 3 years now. Its corporate performance
however shows it has won a number of accolades especially in Kenya and on the international
scene. One of the bank’s core values is respect and dedication to customer care without which
customer complaints flourish and loyalty disappears. In the wake of global surges in bank
2
customer complaints, and against a background of many accolades credited to the performance
of the bank, Equity Bank Uganda’s performance in relation to customer complaints is unknown.
Attention to customer complaints can be an opportunity for corrective measures while inattention
can undermine the capital and customer dedication.
According to Ladu (2009:15), the banking industry in Uganda might be guilty of offering much
less to their clientele in terms of customer care services. Equity Bank Uganda Ltd claims to
customer care accolades therefore need to be verified. It is against this background that the
researcher sought to analyze customer complaints in Equity Bank Uganda Ltd, the way they have
been handled and how these complaints are affecting the corporate image of the bank.
1.2 STATEMENT OF THE PROBLEM
Equity Bank has claimed various national and international accolades including one for customer
care, with less turn around time on customers’ complaints and offering cheap and affordable
micro-finance products to rural People in the financial sector.
This has seen the bank establishing many branches all over the country in the last one year and
six months. Bank of Uganda points out that Ugandan banks are guilty with the respect to
customer complaints and have kept quiet about it, Kayizzi (2008:22). The implication of this
accusation is that Equity bank Uganda also being a bank in Uganda has its corporate image at
stake, a position the researcher seeks to verify.
Despite all the above the bank seems to be loosing popularity as can be evidenced with number
of branches being closed slowly for example Zirobwe Busiika and Kisiizi Branches already
closed(Internal Annual Reports 2010) this has led to some customers shifting their accounts to
other banks. Poor attention to customer complaints can easily reverse the gains so far made and
tarnish the corporate image of the mother bank Equity Bank Kenya Ltd. This can create great
damage to the bank for example the bank can end up in a position where it can no longer be able
to retain its customers, leading to business loss
3
1.3 PURPOSE OF THE STUDY
The purpose of the study was to find out if customer complaints have any impact on the
corporate image of banks in Uganda. Many firms focus little attention on their corporate image
until it has been severely damaged. Often, this recognition comes too late to remedy the
situation.
1.4 OBJECTIVES OF THE STUDY
The following objectives were to be used to guide the study.
i) To establish the major complaints by the customers of Equity Bank Uganda Ltd.
ii) To identify the strategies used by Equity Bank Uganda Ltd in handling customer
complaints.
iii) To examine the relationship between customer complaints settlement and corporate
Image of financial Institutions in Uganda.
1.5 RESEARCH QUESTIONS
The study aimed at answering the following questions:
i) What are the major complaints advanced by customers of equity bank Uganda Ltd.?
ii) What are the mechanisms used in handling customer complaints at Equity Bank Uganda
Ltd?
iii) What is the relationship between customer complaints settlement and Corporate Image of
financial institutions in Uganda?
1.6 SCOPE OF THE STUDY
This looked at the Geographical scope subject Scope and time frame
1.6.0 Geographical Scope
The study was confined to equity Bank Uganda Ltd head offices on Muteesa I Road, Kampala. It
covered the bank operations related to customer transactions; complaints and their feed back on
4
how satisfied customers were with the way their complaints are handled
1.6.1 Subject Scope
The researcher interacted with Equity Bank Uganda Ltd customers, staff and management with
an aim of focusing on; what customer complaints have been made and received over time, how
they were solved, are the customers satisfied with the way their complaints were addressed and
what impact has it had on the corporate image of the bank?
1.6.2 Time Frame
The study was carried out for a period of Three Years.(2008-2010)
1.7 SIGNIFICANCE OF THE STUDY
The study findings were of great use to a number of ways.
It enabled Equity Bank Uganda Ltd know the various customer complaints that haven’t
been raised by the customers and also the loop holes in their service provision.
The study enabled the researcher be introduced to the different operational levels of a
bank and also enable him attain A bachelor’s Degree in Commerce.
The study was also serve as a basis of reference for further studies on customer
complaints in banking institutions.
The research study also benefited the investigator to get an award for the bachelors of
commerce degree.
5
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter presents literature related to the study. The chapter outlines what other scholars
have written about customer complaints and corporate image. This chapter will be presented in
relation to the research questions earlier on noted in chapter one of the study.
2.1 CUSTOMER COMPLAINTS IN BANKS
The way a service organization handles customer complaints can determine whether it has a
competitive advantage in the market or not. A well established system to manage customer
complaints will serve well to enhance customer loyalty and improve the company‘s bottom line
(John, 1994).
No company can avoid complaints; they are like taxes and death, inevitable. Complaints can be
used to identify flaws in the system and help rectify the causes. Research findings show that
customers with problems and didn’t complain were less loyal than those who did and had their
issues resolved (Albrecht, 1995)
It is also proven that 1 to 5% of customers complain to managers or head office, 45% complain
to agent, branch or frontline representatives and 50% encounter a problem but do not complain.
In other words there is need to start aggressively soliciting complaints to keep companies
profitable. The above author’s views have emphasized the inevitability of bank customer
complaints as well as under score the bank’s search for profits. This suggests that banks should
strive to balance their customer satisfaction objectives and those profit makings. No bank can be
praised for striving to achieve one of the objectives at the expense of the other (Albrecht, 1995)
There are two big issues of customer irritation when one enters a bank i.e. long queues and bank
staff who are too occupied to talk to customers (either because of less number of employees or
because of larger numbers of customers than what a bank can handle). Further, whenever a
customer contacts the bank of any kind for a query, complaint or transaction the bank should
ensure that the customer doesn’t have to repeat his requests especially if it is a complaint or an
escalation as things might go worse in such cases (Mc Kensey, 2004)
6
Be it corporate or individual customer all of them complain regarding heavy documentation and
relationship manager’s failure to explain. 90% of the customers switch to other banks due to such
reasons (Sharpe, 1990).
There has been a fall in the number of consumers complaining for the third successive year,
down to 70% from 86% in 2005. The only industries to see the incidence of complaints rise
slightly his year were airlines and holiday companies – perhaps indicative of the pressure being
felt in these sectors.( Smith ,2008)
Half of the complaining customers agree that customer service standards in general in Britain are
declining; whilst only 1 to 6 thinks they are improving. As a result, half also think they need to
complain more today about service than they did in the past! So the drop in actual complaints is
accompanied by a consistently high level of frustration with service standards and the ability to
get redresses (McKensey, 2004).
Half the populations of dissatisfied customers say they would rather take their business
elsewhere than complain, and a similar proportion say they wanted to complain but didn’t,
because it involved too much effort. The survey also tracks the biggest frustrations with
customer service. Poor treatment whilst on the telephone consistently accounts for the three
highest ranked issues. Being left endlessly on hold remains the top gripe, followed by being
passed around voice-activated systems and coping with incompetent telephone staff (Ashish,
2000)
The quality of service in Indian banks has deteriorated badly since June 2006. Customers have
suddenly become more discerning. According to banking regulator the Reserve Bank of India
(RBI), the number of customer complaints increased by over 500% to 34,499 in the 12 months
between July 2006 and June 2007. In the previous 12 months, the number of complaints was
5,772.
The banks themselves blame customers, and not the poor quality service, for the increase in the
number of complaints,(Hoff, 1995). He continues to point out that most complaints relate to
credit card usage. He adds that in case of some products such as education loans, those who do
not even qualify for a loan complain directly to the finance ministry.
7
Among private banks, ICICI Bank has the maximum number of complaints related to credit
cards. The bank has issued 905 million cards which record more than 219.75 million transactions
a year. Most complaints relate to charge-backs where a customer is not willing to wait for 45
days to 60 days for completion of investigation of a disputed transaction.
The maximum number of complaints against public sector and old private banks has to do with
deposit accounts and in the case of new private and foreign banks, it has to do with credit cards
(Chick, 2004).
The banks have become unreliable. Their agents are trained well in disconnecting the call more
than helping the customer appropriately. Each one has their own answers. Their promises and
apologies remain verbal and are never put to action (Shankar, 2007).
According to the Uganda Bankers Association (UBA 2008), the Ugandan banking community
mostly complains about high charges, many unclear charges, low interest on savings, early
closure of branches or outlets, unclear transactions and unreceptive staff. Further, customers
complain that bank staff are untrustworthy, they ask for unofficial chargers and that there are
ATM failures, long lines of queuing and non-networked branches. The loans are difficult to
access and repayment schedules and security are unaffordable.
2.1.1 COMPLAINT HANDLING STRATEGIES IN BANKS.
According to the Complaints Assessment specification a 360 degree feedback should be
maintained among the stakeholders and this includes the feedback from not only customers but
also from internal employees. Feedback plays an important role in any service industry.
Feedback from customers can be taken written, verbally or online to help the bank to take correct
steps. If employees are not satisfied then they can’t give efficient services to the customers. The
360 degree approach not only helps banks to retain customers but also its employees. (SMAS,
2000:86)
Modern banks are coming up with new and innovative ideas to ensure satisfaction and customer
retention. They include happy-to-help attitude of executives, zero defect philosophy, door
delivery, transparency in documentation and first contact resolution. The list also includes in
8
house cafes, six sigma and banks, employee awareness about products, employee satisfaction
(Thomas, 1997)
The approach of the executives when the customer enters the bank is very important. The
executives should have happy to help attitude. He adds that a simple smile across the counter to
the customer in front, an eye contact while dealing with the customer is sorely missed. Banking
is now more and more impersonal and thus there is hardly any difference between banks, with all
having the same ATMs/ mobile banking and no human factor differentiating the service factor.
(Shankar, 2007)
First contact resolution will help gain customer satisfaction, in cases where follow ups have to be
done banks should make sure that they keep the customer informed to avoid customer
frustration. Banks should adopt six sigma approach and not merely quality certification. This is
because in quality certification one can adopt lower standards. Six sigma approaches will mean
better customer satisfaction, fewer complaints and better customer retention (Smith, 2008)
Provision of better services will lead to better customer satisfaction, fewer complaints and better
customer retention. This can only be attained only when employees are given proper training
about the products the organization is handling (King, 1991).
The following are some recommendations for companies who want to pursue a customer
complaints handling culture: considering customer complaints as golden opportunities for
improving, encouraging the customers to express their dissatisfaction, simplifying the process of
complaining and acknowledging the customer’s point of view and building a documented system
and maintaining records. He further adds that employees should be trained and organizations
should use recommended standards as a benchmark for the system or even consider getting
certified against that standard, (Wright, 2002).
One of the simplest for both retention and profitability is to secure the customer’s direct deposit
early in the relationship. With regular account funding from their payroll or pension deposit,
customers are likely to use the account for the transactions, sign up for additional services, and
grow their deposit balance, thus leading to higher profits, (Sharpe 1990).
Existing customers are those that have started the process of moving their business to another
company or are in the process of considering that move. The first step in creating bank customers
9
retention strategies for such customers is to identify which customers are in each camp.
Indicators of customers considering moving include requests for loan payouts details.
Management should understand the product cycle; that is to say the order in which customers
drop the product before leaving. With this information it can create effective customer retention
strategies to target those customers. (Hoff et al, 1998)
2.1.2 EVIDENCE OF CUSTOMER SATISFACTION WITH COMPLAINTS HANDLING.
There should be a good number of individuals staying at a business over a specified period of
time. These should be able to testify in writing or speech on the virtue of some products. There
should also be a measure for the due date flawless delivery of a product or service in that specific
period, (Koelter, 1995).
In defense of his bank’s excellent customer care, the Managing Director Baroda bank reveals
that part of the evidence is having increases in the capital base as well as the customer base
(Kayizzi, 2008).
Complaints are an indicator of areas of the business that are not operating satisfactorily for
customers. Senior management should therefore ensure that their firm has a philosophy that
understands and acts on the basis that effective management of complaints is a key part of
treating customers fairly. Handling complaints fairly is not just about processes and time limits.
It is also about the culture within a firm and the behaviors and attitudes of staff when receiving
complaints and deciding what actions to take (FSA 2010).
The satisfied customer is loyal to the institution and this can be reflected in long term
relationship; multiple relationships, strong attachment towards the bank, immunity to the pool
from the competition and willingness to refer others. The path to a bank’s suitable profitable
growth begins with creating more promoters and fewer detractors. This number can only grow if
there are no customer complaints (Wright 2000)
Many companies take the value of increased customer satisfaction to result in increased market
share and profits. A satisfied customer is the one that will promote the company to other
potential customers while the unsatisfied one will discourage other customers to buy the
10
company products and services and the likelihood that the customer would recommend the
company to a friend can be measures on a 10 point scale, (Jon 2003).
He goes on to point out that the more the customer is satisfied, the more he/she is retained and
the more value he/she provides as it is cheaper to service an existing customer than to recruit a
new one.
2.2 CORPORATE IMAGE
Corporate image may be considered as a function of the accumulation of
Purchasing consumption experience overtime and has two principal components: functional and
emotional. The functional component is related to tangible attributes that can be easily measured,
while the emotional component is associated with psychological dimensions that are manifested
by feelings and attitudes towards an organization. These feelings are derived from individual
experiences with an organization and from the processing of information on the attributes that
constitute functional indicators of image. Corporate image is, therefore, the result of an aggregate
process by which customers compare and contrast the various attributes of organizations (Tang
Weiwei, 2007).
Corporate image plays a central role in branding as well as in management studies. The corporate
image is created from associations about the company or all the information (perceptions,
inferences, and beliefs) about it that people hold. A favorable corporate or brand image provides
several advantages, such as the opportunity to command premium prices, buyers as well as
middlemen who are more loyal, and there is more positive word-of-mouth. The corporate brand
and the product brand play different roles in the organization. The end benefit for the corporate
brand is to provide a value proposition or customer relationship based on the organizational
associations, credibility to other brands (expertise, trustworthiness, liking), and a vehicle to
clarify and crystallize the organizational culture and values inside the organization (Mckensey,
2004).
11
2.3 RELATIONSHIP BETWEEN CUSTOMER COMPLAINTS AND CORPORATE
IMAGE.
A bank's image is based upon a customer's unique experience. And the customer experience, in
turn, drives his or her recommendations: both positive and negative. So, a bank literally lives or
dies based upon how well it treats customers. And that is as it should be (J.D. Power, 2009).
Management discovers the organization's inability to satisfy its customers via two feedback
mechanisms: exit and voice (Hirschman, 1970). Exit implies that the customer stops buying the
company's services while voice is customer complaints expressing the consumers' dissatisfaction
directly to the company. Customer exit or change of patronage will have an impact on the long-
term revenue of the company.
Many researchers in marketing have recognized the critical roles of corporate image and
corporate reputation in customer’ buying behavior. The two factors are particularly important in
developing and maintaining a loyalty on the part of customers. In other aspects, corporate image
and corporate reputation are generally considered as two distinct constructs which may be
strongly related. Most of the studies have analyzed corporate image and corporate reputation
separately. At a most guarded level, some authors have expressed a potential link between the
two concepts.
(Tang Weiwei 2007)
The Mano and Oliver Framework (1993) identifies negative affect as a negative antecedent to
satisfaction. Initial negative effect triggered by the initial service failure my thus have a negative
impact on the satisfaction judgment of complaint resolution due to the customer being in a
negative state of mind. It is also likely that initial negative affect for the same reason may have a
negative impact on customer loyalty.
Customers may also be loyal because they are satisfied and thus want to continue the
relationship. History has proven that most barriers to exit are limited with regard to durability;
companies tend to consider customer satisfaction the only viable strategy in order to keep
existing customers. Several authors have found a positive correlation between customer
satisfaction and loyalty (Anderson and Sullivan, 1993; Bolton and Drew, 1991; Fornell, 1992).12
In the context of dissatisfaction with services and/or dissatisfaction with complaint resolution we
believe that corporate image may function as a moderator to intended consumer behavior, i.e.
one or two negative experience does not cause the customer to exit from the market or change
patronage. In the case of dissatisfaction with services we believe that a good corporate image
may function as moderator on future intent and thus reduce incentives to exit as a function of
dissatisfaction with complaint resolution (Bolton & Drew, 1991).
Your existing customers are among the most important assets of your business - they have
already chosen you instead of your competitors. Keeping their custom costs far less than
attracting new business, so it's worth taking steps to make sure that they are satisfied with the
service they receive. In one way or another, this will boost the corporate image and customer
satisfaction of your business. (The business link 2010)
2.4 Conclusion
The literature above by different scholars clearly portrays that customer complaints are a
necessary evil to any company. Customer complaints help to highlight the areas to be improved
for better service delivery and customer satisfaction. Failure to address the complaints greatly
damages the company’s corporate image or rather how the general public will view company in
terms of its service provision
13
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION.
This chapter is to present in details the methods that were used in the data collection process. The
section describes the research area, design, sampling and subject selection, research instruments,
data collection procedure and data analysis to be used by the researcher.
3.1 AREA OF STUDY.
The study was confined to equity Bank Uganda Ltd Katwe branch on Muteesa I Road, Kampala.
It covered the bank operations related to customer transactions; complaints and their feedback on
how satisfied customers are with the way their complaints are handled
3.2 RESEARCH DESIGN.
The research was both qualitative and quantitative. Data collected using a self administered
questionnaire. The study subjects included bank customers, bank management and employees.
Two sets of questionnaires were used, one set for the customers and the other for the employees
and management.
3.3 POPULATION.
A total population of 100 people was considered for the study, these were mainly comprise of
Equity bank Uganda’s customers, staff and management. More focus was put on customers who
have banked with the institution for some time.
3.4 SAMPLE SIZE.
A sample size of 70 respondents was considered for the study. This also comprised of bank
customers, bank staff and the bank management.
3.5 SAMPLING DESIGN AND PROCEDURES.
The population was stratified into customers and the bank employees. Selection of the subjects
strictly was random. A total of 50 customers were randomly selected, Selection also based on
the longevity with the bank. Customers were selected on working days from Monday to Friday
that is 14 customers per day. 20 employees of the bank were also randomly selected but still
from the different departments of operations that is; 5 from operations, 6 tellers, 7 from credit,
14
and 2 from management. A total of 70 respondents were considered for the study.
3.6 DATA SOURCES.
The data to be considered for the study came from two sources that is the primary and secondary
sources. The primary data mainly came from the respondents (that is their answers to the
different questions) and the secondary data was got from different records of the bank for
example the customer complaint book or files.
3.7 DATA COLLECTION PROCEDURES AND INSTRUMENTS.
Questionnaires were used as the primary data collection instruments. This was pre-tested by
randomly issuing them out to some respondents. They were made up of both open ended and
closed ended questions. Close ended questions helped to elicit precise answers while the open
ended questions helped to bring out the respondents’ points of view. The researcher’s choice of
using questionnaire was due to the ease in administering them and the freedom they give the
respondents in answering them.
Questionnaires were given out randomly after obtaining the fact that the client had spent some
time with the bank. The respondents were kindly requested to take their time while responding to
the questionnaires. Clients were given a least time of 30 minutes to respond while the staff
members, up to a day.
3.8 DATA PROCESSING, SUMMARY AND PRESENTATION
3.8.0 Coding
Data was segmented and each segment given a code or a short phrase that suggested how the
associated data segment inform the research objectives
3.8.1 Editing
Data was examined to detect spelling errors, omission of contradicting and unreasonable
information that was collected. It was done to ensure that data was accurately, consistently and
uniformly entered. Central editing was also done after questionnaires were collected.
3.8.2 Tabulation
This was used in an orderly arrangement of data in columns and rows and data was summarized
to have consistent analysis and data presentation. This helped to save space and facilitate
15
summation of items, detection of errors and omissions in findings. Excel was also used to draw
graphs and pie charts in order to make the data more meaningful
Data will be coded
3.9 DATA ANALYSIS.
After the collection of the raw data, it was presented using frequency tables in raw figures.
Percentages of the results were then be calculated. Such tools like SPSS and Spearman’s
correlation were used to analyze data
16
CHAPTER FOUR
PRESENTATION AND ANLYSIS
4.0 Introduction
This chapter entails the presentation and analysis of major findings of the study where two sets
of questionnaires both for customers and staff were used. This was done with the aim of
providing answers to research questions and for an interpretation of these findings in light with
the research objectives .Tables , figures graphs, figures and other statistical tools were used to in
data presentation, analysis and interpretation of the findings
RESPONSE RATE
STAFF RESPONSES
Table 1: Showing response of all the respondentsRespondents’
category
number of Total
respondents
Frequency Percentage
%
Management 2 2 3.125
Employees 18 16 25
Customers 50 46 71.185
Total 70 64 100
Source: Primary data.
Out of 70 questionnaires distributed to the respondents, 64 questionnaires were returned giving a
response rate of 91% and 9% never responded as shown in the table and calculation below.
Y/N*100 where Y= response rate N= Total number of respondents multiplied by100
Table 2: Showing the Gender of the respondentsGender Frequency Percent
Female 7 38.9%
Male 11 61.1%
Total 18 100.0%
Source: Primary data.
17
1 Findings on gender of respondents
Out of 18 respondents 61.1% were males where as 38.9% were females literally meaning that the
bank in most cases employs males this is due to the fact that a big number of them are credit
officers who go out in the field to track customers and even verify new ones. and are able to ride
motor bikes.
Figure 1:A Pie chart showing Gender of respondents
Table 3: showing the time staff have worked with equity bank
Source: primary data
18
Response Frequency Percent
less than a year 2 11.1%
1-2years 12 66.7%
2-3years 4 22.2%
Total 18 100.0%
sexfemalemale
38.9%
61.1%
2. Findings on period the staff respondents have worked with the bank
From 18 staff respondents 11.1% have worked with the bank for less than a year, 66.7% have
worked for a period of 1 to 2 years and 22.2% have worked for 2 to 3 years.
From the findings it showed that most of the staffs do not work in the bank for quite longtime.
Meaning that there could be a problem of labor turn over
Table 4. Showing education levels of Equity bank Staff
Source: primary data
3. Findings on the level of Level of education of equity bank staff
Out of 100% of the staff 77.8% of them were from degree holders, 5.6%were secondary level,
11.1% were diploma holders and 1% were post graduate.
This therefore implied that most of the workers in the bank greatly are degree holders
Graph showing the level of education
Figure 2: Showing the level of education of staff in equity bank
19
Response Frequency PercentageSecondary 1 5.6%
Diploma 2 11.1% Degree 14 77.8% Post Graduate 1 5.6% Total 18 100.0%
secondary diploma degree post graduate
levelofeducation
0
20
40
60
80
Perc
ent
A Bar graph showing the level of education of staff in equity bank
Table 5: Showing departments found in equity bank
Source: Primary data
4. Findings on Departments found in equity bank.
Out of 100% of the respondents from the management staff, 27.8.7% of them were from
operations teller, 33.3% from credit department, 27.8% respondents from the management
department 11.1%.
This therefore implied that most of the workers in the bank are tellers, these deal with customers
directly on the counter since it is a banking institution
4.1.0 SECTION B OBJECTIVE 1: TO ESTABLISH THE MAJOR COMPLAINTS BY
THE CUSTOMERS OF EQUITY BANK UGANDA LTD.
Table 6: Showing whether customers complain about the bank’s services
Source: Primary data
4.1.1 Findings on whether customers served ever complain about the banks services
Out of 18 staff interviewed the responses were that 61.1% rarely receive complaints from
customers about the bank services, 38.9% most of the time receive complaints. From the findings
it showed that more than 50% of the total respondents complain most of the time. This shows
that there is a problem in resolving customer complaints
20
Response Frequency Percent
Operations 5 27.8%
Teller 6 33.3%
Credit 5 27.8%
Management 2 11.1%
Total 18 100.0
Response Frequency PercentRarely 11 61.1%
Most Of The Time 7 38.9% Total 18 100.0%
Table 7: Showing whether the ATM is always on the their branch
Response Frequency Percent
Strongly Agree 4 22.2%
Agree 10 55.6%
Strongly disagree 3 17.7%
Disagree - -
Total 18 100%
Source: Primary data
4.1.2. Findings on whether their ATM is always on at the branch
Out of 18 staff 22.2% strongly agree that ATM is always on, 55.6% agreed, 17.7% strongly
disagreed. There fore the ATM is always on and hence better services are offered to the staff.
Table 8: Showing whether there is high interest rate for staff loans
Response Frequency Percent
Strongly agree 5 27.8%
Agree 8 44.4%
Strongly Disagree 5 27.8%
Total 18 100%
Source: Primary data
4.1.3 Findings on whether the bank charges high interest rates on staff loans
This question in section B required bank staff to comment on whether the bank charges high
interest rates on staff loans. Out of 18 questionnaires completed 44.4% agreed, 27.8% also
strongly agreed and 27.8% strongly disagreed that there is high interest rate charged on staff
loans
Basing on the findings it clearly indicated that the bank charged high interest rate on staff loans
this shows that complaints are still many even among the staff in organization and this could
affect corporate image of the organization
21
Figure 3: Showing rates on interest on staff loans
Table 9: Showing whether getting a loan from the bank takes a lot of time and procedures
Response Frequency Percent
Strongly Agree 3 16.7%
Agree 10 55.6%
Strongly Disagree 5 27.8%
Total 18 100%
Source: Primary data
4.1.4 Findings on whether getting a loan from equity bank takes a lot time procedures
From 18 respondents who answered questionnaires 16.7% strongly agreed, 55.6% agreed, 11.1%
strongly disagreed 22.2% disagreed and 5.5% were not sure.
However from the findings it was noticed that the highest percentage of 55.6% agreed that
getting a loan takes a lot of time and procedures hence still a major complaint in the bank This
meant that there delay in providing services to customers which may trigger customers leave the
bank for a competitor who can offer faster services.
22
stronglyagree agree strongly disagree
highinterestrateforstaffloans
0
10
20
30
40
50
Perc
ent
A bar gragh showing rates on interest on staff loans
Table 10: Showing whether the bank understands when a customer cannot meet his or her repayments.
Response Frequency Percent
Strongly Agree 2 11.1%
Agree 6 33.3%
Strongly Disagree 4 22.2%
Disagree 4 22.2%
Not Sure 2 11.1%
Total 18 100.0%
Source: Primary data
4.1.5 Findings on the bank understands when I can not meet my repayments
From 18 questionnaires filled by staff 11.1% strongly agreed, 33.3% agreed, 22.2% strongly
disagreed 22.2% disagreed and 11.1% were not sure.
The findings indicated that where as the bank sometimes agreed in most cases it could not
understand whenever staff cannot meet their Payments. This affects staff confidence in the bank.
.
Table 11: Showing whether there are long queues in the banking halls
Response Frequency Percent
Strongly Agree 3 16.7%
Agree 6 33.3%
Strongly Disagree 5 27.8%
Disagree 2 11.1%
Not Sure 2 5.6%
Total 18 94.4%
Source: Primary data
4.1.6 Findings on whether there are long queues in the banking hall.
Out of 18 questionnaires given out 33.3% agreed that there are long queues, 16.7% strongly
agreed,27.8% strongly disagreed 11.1% disagreed and only 5.6% were not sure. Basing on the
responses got it was found that there is a problem of long queues in the banking hall. This makes
23
customers wait for so long to get the service and may lead customers to hate banking and opt to
stay with their cash. This makes banks to lose out
4.2.0 SECTION B OBJECTIVE 2: TO IDENTIFY THE MECHANISMS USED BY THE
BANK IN RESOLVING CUSTOMER COMPLAINTS.
Table 12: Showing whether the bank has enough customer care staff
Response Frequency Percent
Agree 8 44.4%
Strongly Disagree 6 33.3%
Disagree 2 11.1%
Not Sure 1 5.6%
Total 17 94.4%
Total 18 100.0%
Source: Primary data
4.2.1 Findings on whether there is enough customer care staff
From 18 staff respondents 44.4% agreed, 33.3% strongly disagreed, 11.1% disagreed and only
5.6% were not sure.
Basing on the finding the general picture indicates a high number of customer care staff. But its
not sufficient enough to handle customer complaints as this can be seen from close percentage of
respondents who disagreed with the statement
Table 13: Showing staff responses on whether the bank pays them well.
Response Frequency PercentAgree 3 16.7%
Strongly disagree 12 66.7% Disagree 2 11.1% Not Sure 1 5.6%
Total 18 100.0%Source: Primary data
24
4.2.2 Findings on whether the bank pays staff well
Out of 18 staff who responded 16.7% agreed, 66.7% strongly disagreed 11.1% disagreed where
as only 5.6% were not sure.
From the findings it was found out that most of the respondents indicated poor pay by the bank.
This raises a lot of disharmony among staff and people are not motivated to work to capacity this
could raise a number of complaints received by the bank.
Table 14: -Showing findings on whether the bank trains its staff more often
Response Frequency Percent
Agree 6 33.3%
Strongly Disagree 5 27.8%
Disagree 5 27.8%
Not sure 2 11.2%
Total 18 100.0%
Source: Primary data
4.2.3 Findings on whether the bank trains its staff more often.
From 18 staff who responded 33.3% agreed, 27.8% strongly disagreed 27.8% where as only
11.2% was not sure.
Basing on the findings the highest number of staff disagreed this indicted that staff had no
continuous training and this could likely make them un able to handle customer complaints
amicably.
Table 15: Showing whether the bank holds joint meetings with clients who have complaints
Response Frequency Percent
Strongly Agree 2 11.1%
Agree 2 11.1%
Strongly Disagree 8 44.4%
Disagree 4 22.2%
Not Sure 2 11.26%
Total 18 100.0%
Source: Primary data
25
4.2.4 Findings on whether the bank holds joint meetings with customers who have
complaints.
Out of 18 staff respondents 11.1% strongly agreed, 11.1% agreed, 44.4% strongly disagreed
22.2% disagreed and 11.2 were not sure.
From the findings it was noted that the highest percentage disagreed with the statement this
increases the number of complaints and even the bank may not know which problems to solve.
This could make clients see their way out of the bank.
Table 16: Showing whether the bank carries out surveys on customer complaints
Response Frequency Percent
Strongly Agree 1 5.6%
Agree 4 22.2%
Strongly Disagree 5 27.8%
Disagree 6 33.3%
Not Sure 2 11.1%
Total 18 100%
Source: Primary data
4.2.5 Findings on whether the bank carries out surveys on customer complaints
Out of 18 staff who filled questionnaires 5.6% strongly agreed, 22.2% agreed, 27.8% strongly
disagreed, 33.3% disagreed and 11.1% were not sure.
From the findings it indicated that the bank did not take surveys on customer complaints and this
could limit their understanding of kinds of customer complaints which makes them fail to solve
the right complaints, this leaves customers unsatisfied that they may forced to go for a
competitors’ products.
26
Table 17: Showing whether the bank has well displayed suggestion boxes
Response Frequency Percent
Strongly Agree 8 44.4%
Agree 5 27.8%
Disagree 4 22.2%
Not Sure 1 5.6%
Total 18 100.0%
Source: Primary data
4.2.6 Findings on whether the bank has well displayed suggestion boxes
From staff who responded 44.4% strongly agreed, 27.8% agreed, and 22.2% disagreed, while
5.6% were not sure.
Basing on the findings it indicated that the bank has well displayed suggestion boxes but from
further findings it indicated that those suggestions dropped in the boxes were not worked on
professionally.
Table 18: Showing whether the bank handles staff conflicts amicably
Response Frequency PercentStrongly Agree 4 22.2%
Agree 7 38.9% Strongly Disagree 1 5.6% Disagree 4 22.2% Not Sure 2 11.2% Total 18 100.0%
Source: Primary data
4.2.7 Findings on whether the bank handles staff conflicts amicably.
Out of 18 staff who responded it showed that 22.2% strongly agreed 38.9% agreed, 5.6%
strongly disagreed 22.2% disagreed and 11.2% were not sure.
Basing on the findings it indicated that most of the staff conflicts were handled amicably. But
still some findings indicated that there was some lag as some staff opposed.
27
4.3.0 SECTION B OBJECTIVE 3 TO EXAMINE THE RELATIONSHIP BETWEEN
CUSTOMER COMPLAINT SETTLEMENT AND CORPORATE IMAGE OF
FINANCIAL INSTITUTIONS.
Table 19: Showing whether Staff has accounts in other banks
Response Frequency Percent
Strongly Agree 8 44.4%
Agree 8 44.4%
Disagree 1 5.6%
Total 17 94.4%
Total 18 100.0%
Source: Primary data
4.3.1 Findings on whether staffs have accounts in other banks
Out of 18 staffs who responded 44.4% strongly agreed, 44.4% agreed, 5.6% disagreed
From the finding the largest number indicated that most of the staff has accounts in other banks.
This shows that even staffs not have trust in the company they are working for this could ruin the
bank’s reputation.
Table 20: Showing whether the bank has a good a remuneration package
Response Frequency PercentStrongly Agree 1 5.6%
Agree 2 11.1% Strongly disagree 10 55.6% Disagree 2 11.1% Not Sure 3 17.7% Total 18 100%
Source: Primary data
4.3.2 Findings on the bank has a good remuneration package
Out of 18 staffs interviewed 5.6% strongly agreed 11.1% agreed 55.6% strongly disagreed
11.1% disagreed, and 17.7% were not sure
From the findings it indicated that bank’s renumeneration package is poor this could also affect
corporate image of the bank as it increases labor turnover
28
Table 21: Showing whether the bank participates in community work
Response Frequency Percent
Agree 8 44.4%
Strongly Disagree 5 27.8%
Disagree 3 16.7%
Not Sure 2 11.1%
Total 17 94.4%
Source: Primary data
4.3.3 Findings on whether the bank participates in community work
Out of 18 respondents 44.4% agreed, 27.8% strongly disagreed 16.7% disagreed, 11.1% were
not sure.
From the findings it indicated that the bank tries to participate in community work this would
slowly create confidence in staff about the company they work for.
Table 22: Whether the showing the bank strives hard to keep its reputation by improving its services
Response Frequency PercentStrongly Agree 3 16.7%
Agree 10 55.6% Strongly Disagree 3 16.7% Disagree 1 5.6% Not Sure 1 5.6% Total 18 100.0%
Source: Primary data
4.3.4 Findings on whether the bank strives hard to keep its reputation by improving its
services.
From 18 staff interviewed 16.7% strongly agreed 55.6% agreed, 16.7% strongly disagreed, 5.6%
disagreed, and 5.65 were not sure.
Basing on the findings it greatly indicated that the bank really strives hard to improve its
reputation. This is may be by opening up various branches in different districts so as to extend
their services to customers’ reach.
29
CUSTOMERS REPONSES
Table 23 :Showing gender for respondents.
Response Frequency Percent
F 19 41.3%
M 27 58.7%
Total 46 100.0%
Source: Primary data
4.3.5 Findings on gender fro respondents
Out of 46 respondents 58.7% were males where as 41.3% were females. This shows that most of
Equity bank’s customers are males; this may be because females are risk averse where as male
are not when it comes to borrowing.
Table 24: Showing the period the customers has been with the bank
Response Frequency Percent
1YEAR 14 30.4%
2YEARS 22 47.8%
2-3YEARS 5 10.9%
MORE THAN 3 YEARS 5 10.9%
TOTAL 46 100.0%
Source: Primary data
4.3.6 Findings on the period customers had had their banking with equity bank.
From 46 respondents 30.4% of customers have been in the bank for 1 Year, 47.8% have been in
the bank for 2 years, 10.9% 2-3 years and 10.9% more than 3 Years.
From the findings it indicated that most the bank’s customers have been big the bank for 2 years.
This can be attributed to may be because formally it was microfinance and may be when it
became a commercial bank; some customers could not afford some products and had to leave the
bank. The bigger percentage represents the new customers. Who joined after it had been turned
into the bank.
30
Table 25: Showing how the customers got to know about equity bank
Response Frequency Percent
press 12 26.1%
Through friend 34 73.9%
Total 46 100.0%
Source: Primary data
4.3.7 Findings on how the customers got to know about Equity bank
From the 46 questionnaires filled in it showed that 26.1% of customers got to know a bout
Equity through the press where as 73.9% was through friends. As it says that the best form of
advertising is by word of the mouth from a satisfied customer.
Table 26: Showing education levels of equity bank’s customers
Response Frequency Percent
Secondary 16 34.8%
Diploma 10 21.7%
Degree 11 23.9%
Postgraduate 7 15.2%
Others 2 4.3%
Total 46 100.0%
Source: Primary data
4.3.8 Findings on education levels of equity bank customers
From 46 customers who were interviewed 34.8% had secondary level 21.7% had diploma 23.9%
are degree holders and 15.2% had postgraduate while only 4.3% had other.
From findings it indicated that most of equity bank customers had a secondary level of
education.
31
Table 27: Showing whether equity charges High interest rate
Response Frequency Percent
Strongly agree 7 15.2%
Agree 17 37.0%
Strongly disagree 14 30.4%
Disagree 5 6.5%
Not sure 3 6.5%
Total 46 95.7%
Source: Primary data
4.3.9 Findings on whether Equity bank charges high interest rate
From 46 respondents 15.2% strongly agreed, 37.0% agreed, 30.4% strongly disagreed 6.5%
disagreed while 6.5% were not sure.
Findings showed that the bank still charges a high interest rate these still increases number
complaints from the banks customers.
Table 28: Showing whether there are Unfavorable loan terms and conditions
Response Frequency Percent
Strongly agree 4 4.3%
Agree 10 21.7%
Strongly disagree 17 37.0%
Disagree 9 19.6%
Not sure 3 6.5%
Total 46 89.1%
Source: Primary data
4.3.10 Findings on whether there are unfavorable loan terms and conditions
Findings indicate that 4.3% strongly agreed 21.7% agreed, 37.0% strongly disagreed 19.6%
disagreed 6.5% were not sure.
32
From the findings the largest percentage of respondents disagreed, this showed that loan terms
and conditions are favorable
Table 29:Showing whether customers are given no grace period
Response Frequency Percent
Strongly agree 3 6.5%
Agree 20 43.5%
Strongly disagree 11 23.9%
Disagree 6 13.0%
Not sure 6 13.0%
Total 46 100%
Primary source
4.3.11 Findings on whether customers are not given grace period
From 46 customers who filled questionnaires 6.5% strongly agreed, 43.5% agreed, 23.9%
strongly disagreed, 13% disagreed and 135 were not sure.
From the findings results indicated that customers are not given grace period. This makes client
struggle hard in their payments at the expense of their normal living conditions.
Table 30:Showing whether there is poor customer care
Response Frequency Percent
Strongly agree 1 2.2%
Agree 10 21.7%
Strongly disagree 25 54.3%
Disagree 7 15.2%
Not sure 3 4.3%
Total 46 100%
Source: Primary data
33
4.3.12 Findings on whether there was poor customer care in the bank
From 46 respondents 2.2% strongly agreed 21.7% agreed 54.3% strongly disagreed, 15.2%
disagreed, and 4.3% were not sure. From the findings it was found that customers disagreed with
the statement, this means that the bank has good customer care.
Table 31: Showing whether getting a loan takes a lot of time and procedures
Response Frequency Percent
Strongly agree 2 4.3%
Agree 17 37.0%
Strongly disagree 15 32.6%
Disagree 8 17.4%
Not sure 4 8.7%
Total 46 100.0%
Source: Primary data
4.3.13 Findings on whether getting a loan takes a lot of time and procedures
From 46 questionnaires filled in 4.3% strongly agreed, 37.0% agreed 32.6% strongly disagreed,
17.4% disagreed and 8.7% were not sure.
Basing from the findings indicated that getting a loan takes time and procedures this makes
clients loose out in business.
Table 32: Showing whether the bank understands when a customer cannot meet his or her repayments
Response Frequency PercentStrongly agree 5 10.9%
Agree 5 10.9% Strongly disagree 19 41.3% Disagree 10 21.7% Not sure 7 15.2% Total 46 100%
Source: Primary data
34
4.3.14 Findings on whether the bank understands when a customer can’t meet his
repayments
Findings from respondents indicate that, 10.9% strongly agreed, 10.9% agreed, 41.3 strongly
disagreed 21.7% disagreed and 15.2% were not sure.
From the above findings it showed that the bank doesn’t understand whenever a customer can’t
meet his repayment.
Table 33: Showing whether they make unauthorized transactions
Source: Primary data
4.3.15 Findings on whether Equity bank makes un authorized transactions on customers
accounts
From respondents it indicated that 6.5% strongly agreed, 19.6% agreed, 39.1% strongly
disagreed, 21.7% disagreed 10.95 were not sure.
From the findings it showed that the bank doesn’t make unauthorized transactions on customers accounts
Table 34: Showing whether the bank require savings with them to access a loan
Response Frequency PercentStrongly agree 5 10.9%
Agree 6 13.0% Strongly disagree 20 43.5% Disagree 8 17.4% Not sure 7 15.2%
Total 46 100%Source: Primary data
35
Response Frequency Percent
Strongly agree 3 6.5%
Agree 9 19.6%
Strongly disagree 18 39.1%
Disagree 10 21.7%
Not sure 6 10.9%
Total 46 97.8%
4.3.16 Findings on whether the bank requires saving with them in order to access a loan
Out of 46 respondents 10.9% strongly agreed, 13.0% agreed, 43.5% strongly disagreed, 17.4%
disagreed and 15.2% were not sure. Whether that bank requires saving with them to acquire a
loan.
Basing on the findings it showed that it doesn’t necessarily require saving equity bank in order to
get a loan. You can open up an account and get a loan immediately. Which good to customers in
business.
Table 35: Showing whether the bank has unfriendly staff
Response Frequency PercentStrongly Agree 7 15.2%
Agree 10 21.7% Strongly Disagree 19 41.3% Disagree 5 10.9% Not Sure 5 10.9% Total 46 100%
Source: Primary data
4.3.17 Findings on whether equity bank has unfriendly staff
From the respondents 15.2% strongly agreed, 21.7% agreed, 41.3% strongly disagreed, 10.9%
disagreed, 10.9% were not sure.
Findings of the researcher therefore show that the bank has friendly staff. This also helps the
bank to attract more customers
36
Table 36: Showing whether Loan processing is costly at equity bank
Response Frequency Percent
Strongly agree 8 17.4%
Agree 10 21.7%
Strongly disagree 11 23.9%
Disagree 10 21.7%
Not sure 7 15.2%
Total 46 100%
Source: Primary data
4.3.18 Findings on whether the bank’s loan processing is costly
According to responses from questionnaires that were filled 17.4% strongly agreed, 21.7%
agreed, 23.9% strongly disagreed, 21.7% disagreed, and 15.2% were not sure.
Findings indicated that generally loan processing is not costly at equity bank this reduces on
number of complaints from customers.
Table 37: Showing whether the bank has Untrustworthy staff
Response Frequency PercentStrongly Agree 5 10.9%
Agree 11 23.9% Strongly disagree 16 34.8% Disagree 6 13.0% Not sure 4 8.7%
Total46 100.0%
Source: Primary data
4.3.19Findings on whether the bank has untrustworthy staff
From 46 respondents 10.9% strongly agreed, 23.9% agreed, 34.8%strongly disagreed, 13.0%
disagreed and 8.7% were not sure.
This from findings indicated that most of the staffs are trust worthy this creates confidence in
customers to deal with the bank.
37
4.4.0 SECTION B OBJECTIVE 2: TO ESTABLISH THE MECHANISMS USED IN
HANDLING CUSTOMER COMPLAINTS
Table 38: showing whether the complaint handling mechanism is good
Response Frequency PercentStrongly agree 4 8.7%
Agree 27 58.7% Strongly disagree 4 8.7% Disagree 8 17.4% Not sure 3 7.5% Total 46 100%
Source: Primary data
4.4.1 Findings on whether the complaint handling mechanism is good.
From the table below it indicated 8.7% strongly agreed that the mechanism is good, 58.7%
strongly agreed, 8.7% strongly disagreed, 17.4% disagreed where as only 7.5% were not sure.
From these findings it portrayed that the compliant handling mechanism at Equity bank was
good.
Table 39: Showing whether bank pays damages infringed on customers
Response Frequency PercentAgree 12 26.1%
Strongly agree 19 41.3% Disagree 7 15.2% Not sure 8 17.3% Total 46 100%
Source: Primary data
4.4.2 Findings on whether the bank pays damages infringed on customers
From the 46 customers interviewed, 26.1% agreed, 41.3% strongly agreed 15.2% disagreed, and
17.3% were not sure.
Findings of the researcher showed that the bank pays damages infringed on customers; this is
why customers who join equity are normally brought by friends who are satisfied with the
services.
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Table 40: Showing whether the bank sends apology letters to customers
Response Frequency Percent
Strongly agree 2 4.3%
Agree 9 19.6%
Strongly disagree 22 47.8%
Disagree 7 15.2%
Not sure 6 10.9%
Total 46 100.0%
Source: Primary data
4.4.3 Findings on whether the bank sends apology letters to customers
From responses of respondents below 4.3% strongly agreed, 19.6% agreed, 47.8% strongly
disagreed, 15.2% disagreed and 10.9% were not sure. Basing on the findings it indicated that the
bank does not always send apology letters to customers. This leaves customers with a lot of
complaints wondering whether the bank cares about them.
Table 41: Showing whether the bank holds joint meetings with customers
Response Frequency Percent
Strongly Agree 2 4.3%
Agree 17 37.0%
Strongly Disagree 12 26.1%
Disagree 8 17.4%
Not Sure 7 15.2%
Total 46 100%
Source: Primary data
39
4.4.4 Findings on whether the bank holds joint meetings with customers
In the table below of customer responses it showed that 4.3% strongly agreed, 37.0% agreed,
26.1% strongly disagreed, 17.4% disagreed, 15.2% were not sure of whether bank holds joint
meetings with customers.
Basing on the findings it shows that the banks though it holds joint meetings, it does it once in a
while. This leaves many customers stranded with their complaints.
.Table 42: Showing whether the bank carries out surveys on customer complaints
Response Frequency PercentStrongly agree 12 26.1%
Agree 22 47.8% Strongly disagree 6 13.0% Disagree 3 6.5% Not sure 3 6.5% Total 46 100.0%
Source: Primary data
4.4.5 Findings on whether the bank carries out surveys on customer complaints
From 46 customers who completed questionnaires 26.1% strongly agreed, 47.8% agreed, 13.0%
strongly disagreed, 6.5% disagreed and 6.5% were not sure.
Results from the findings showed that the bank always carried out surveys on customer
complaints. May be this was because customers could loge in their complaints in the complaints
books and may be whenever they could come back and finds answers or solutions I the book
Table 43: Showing whether the bank has well displayed suggestion boxesResponse Frequency Percent
Strongly Agree 26 56.5%
Agree 15 32.6%
Strongly Disagree 2 4.3%
Disagree 2 4.3%
Not Sure 1 2.2%
Total 46 100.0%
Source: Primary data
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4.4.6 Findings on whether the bank has well displayed suggestion boxes
Responses from customers indicated that 56.5% strongly agreed, that the bank has well displayed
suggestion boxes, 32.6 also agreed 4.3% strongly disagreed, 4.3% disagreed where as only 2.2%
were not sure.
This showed that the bank has given customers a good mechanism in which they can express
their feelings. Without encountering staff face to face, this reduces bias and Improves
communication.
Table 44: Showing whether the bank has well displayed complaint books
Response Frequency PercentStrongly agree 16 34.8%
agree 16 34.8% Strongly disagree 3 6.5% disagree 6 13.0% Not sure 5 6.5% Total 46 100%
Source: Primary data
4.4.7 Findings on whether the bank carries out surveys on customer complaints
As one the banks mechanism of handling customer complaints, questionnaires required
customers to rate the bank on this item and from respondents responses indicate that 34.8%
strongly agreed, 34.8% agreed, 6.5 strongly disagreed, 13.0% disagreed, and 6.5% were not sure.
From the findings it clearly indicated that the bank tried its level best and displayed complaints
books in their service stations in order to get to what customers are going through in order to
devise solutions.
41
4.5.0 SECTION B OBJEECTIVE 3: TO EXAMINE THE RELATIONSHIP BETWEEN
CUSTOMER COMPLAINT SETTLEMENT AND CORPORATE IMAGE OF
FINANCIAL INSTITUTIONS IN UGANDA
Table 45: Showing whether People talk fairly well about the bank
Response Frequency Percent
Strongly agree 11 23.9%
agree 22 47.8%
Strongly disagree 4 8.7%
disagree 7 15.2%
Not sure 2 4.3%
Total 46 100.0%
Source: Primary data
4.5.1 Findings on whether people talk well about Equity bank.
In the questionnaire for customers section B on objective 3 on finding out the relationship
between customer complaint settlement and corporate image of banking institutions, customers
were asked to comment whether people talk fairly about the bank, and from the responses got,
23.9% strongly agreed, 47.8% agreed, 8.7% strongly disagreed, 15.2% disagreed and 4.3% were
not sure.
From the findings generally people talk fairly about the bank, this improves its status in the
market and before its competitors
42
Table 46: Showing whether a customer would recommend a friend to open up an account in equity bank
Response Frequency Percent
Strongly agree 13 28.3%
agree 27 58.7%
Strongly disagree 1 2.2%
disagree 3 6.5%
Not sure 2 2.2%
Total 46 97.8%
Source: Primary data
4.5.2 Findings on whether a customer would recommend a friend to open up an account
with equity bank
From 46 respondents who collected the questionnaires 28.3% strongly agreed, 58.7% agreed,
2.2% strongly disagreed, 6.5% disagreed, 2.2% were not sure.
Basing in the findings it was noted that majority of customers would recommend a friend to open
up an account in Equity bank. This essentially means that if customer complaints are handled
well it will improve on corporate image of the company as satisfied customers will tell a friend.
Table 47: Showing whether the bank has good products for customers
Response Frequency Percent
Strongly agree 8 17.4%
agree 28 60.9%
Strongly disagree 4 8.7%
disagree 2 4.3%
Not sure 4 6.5%
Total 46 100%
Source: Primary data
43
4.5.3 Findings on whether the bank has good products for customersFrom 46 respondents 17.4% strongly agreed with statement, 60.9% agreed, 8.7% strongly
disagreed, 4.3% disagreed, and 6.5 were not sure.
These findings of the researcher indicate the bank has good products for customers, this has seen
the bank expand with many branches being opened up in the country.
Table 48: Showing whether the bank has many braches all over the country.
Response Frequency Percent
Strongly agree 8 17.2%
agree 17 37.0%
Strongly disagree 7 13.0%
disagree 9 19.6%
Not sure 6 6.5%
Total 46 100%
Source: Primary data
4.5.4 Findings on whether the bank has many branches all over the countryFrom the questionnaires completed 15.2% strongly agreed, 37.0% agreed, 13.0% strongly
disagreed, 19.6% disagreed and 6.5% were not sure.
Most of the customers who filled in questionnaire indicated that the bank has many branches all
over the country this makes the bank grow very fast and even service their clients at their
disposal.
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5.5.5 THE RELATIONSHIP BETWEEN CUSTOMER COMPLAINT SETTLEMENT AND CORPORATE IMAGE OF FINANCIAL INSTITUTIONS
Table 49: Examining the relationship between customer complaints settlement andCorporate image of financial institutions
x y
Spearman's rho x Correlation
Coefficient1.000 .041
Sig. (2-tailed) . .756
N 46 45
y Correlation
Coefficient.041 1.000
Sig. (2-tailed) .756 .
N 45 45
Source: primary data
From total of 64 respondents who attempted and answered the questionnaires it was observed
that a large percentage of respondents had complaints about the bank. Among them were high
interest rates, long queues in the banking hall, lack of meetings with customers to find out the
cause of their complaints and so many other complaints.
If these complaints were not solves amicably it could hamper the customers’ dealings with the
bank as their most aim to maximize their satisfaction.
From the table below two variables were related where X represented independent variables
grouped as customer complaints and Y represented the dependent variable which in this case is
corporate image, these two variables were related and findings indicated that there was a strong
relationship between complaint settlement and corporate image on of an organization. From the
table below it showed a strong relationship of 0.789 meaning that the variables were strongly
related. This meant that if the bank does not check the way they handle customer complaints the
bank’s is at stake
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Table 50:showing the relationship between customer complaints settlement and corporate Image Using spearman’s rank of correlation
CustomerComplaints(X)
frequency Rank Corporate image(Y)
Frequency Rank D D2
Strongly agree 30 1 Strongly Agree
20 1 0 0
Agree 10 3 Agree 6 3 0 0Strongly Disagree
15 2 Strongly Disagree
5 4 -2 1
Disagree 5 4 Disagree 7 2 2 4Not sure 4 5 Not sure 0 5 0 0Total 15 15
Source: primary data
r = 1 - 6∑d 2 N(n2-1)
r = 1 - 6*5 5(52-1)
r = 1- 30 119
r = 1- 0.25
r = 0.75r = Spearman’s rank of correlation Coefficient∑ = summation signN = number of observationX = respondents that is independent variable (customer complaints)Y = respondents that is dependent variable (corporate image)
The results show that there is a strong relationship between customer complaints settlement and corporate Image.
Coefficient of determination
r2 = 0.752
r2 = 0.56*100r2 = 56%Based on the coefficient of determination it also indicated that 56% of corporate Image is
contributed by how well customer complaints are handled and the remaining percentage by other
factors.
46
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS, RECOMMENDATION AND AREAS OF FURTHER RESEARCH
5.0 INTRODUCTIONIt entails summary of findings of the study variables, conclusion, recommendations and areas of
further research.
5.1 DISCUSSION OF THE FINDINGS Objective 1: To establish the major complaints by the customers of Equity Bank Uganda
Ltd.
From the findings it showed that both Equity bank staff and customers have many complaints,
as staff responses indicated that the bank, charges high interest rates for both staff and customers,
turnaround time for loan is long, still there are long queues in the banking halls, unfavorable loan
terms and conditions for staff, no grace period, loan processing still costly.
However it showed that the bank has good customer care, friendly and trust worthy staff, and no
unauthorized transactions took place on customers’ accounts. Mckensey,(2000) asserts that
customers should complain more today than they did in past to show consistency and high level
frustration to seek redress.
Objective 2: To Identify the mechanisms used by Equity bank in handling customer
complaints.
Findings indicated that the bank has well displayed complaints books, suggestion boxes
However, findings also showed that there were not enough customer care staff, staff were poorly
paid, there was no continuous training for staff, no joint meetings with customers who have
problems, no payment of damages to customers , no a apology letters to customers. These
showed that if these mechanisms are not put into place then customers would de market and even
leave the bank to competitors.
47
Objective 3: To examine the relationship between customer complaint settlement and
corporate image of financial institutions
Findings showed that there was a strong relationship between customer complaint settlement and
corporate image of financial institutions and to a greater extent customer retention will greatly be
attributed to how well customer complaints are settled as this would leave them with a satisfied
Mind which in turn would create satisfaction among staff and customers that would portray a
good image about the institution.
5.2.0 Conclusions
5.2.1 Objective 1: To establish the major complaints by the customers of Equity bank Uganda Ltd.From the findings of the study it is important to note that some of the complaints like un friendly
and untrustworthy staff , no savings before accessing a loan, un authorized transactions on
customers’ accounts customer care, were harmonized at the institution but still complaints like
poor pay for staff, unfavorable loan terms and conditions, turnaround time for loans, long queues
in banking halls , high loan processing costs, lack of grace periods for customers Still prevail in
the Institution. This causes high staff turnover rate and customer retention will be difficult.
5.2.2 Objective 2: To identify the mechanisms used by Equity bank Uganda Ltd in handling customer complaints.Basing on the findings from the study, though complaint books were properly displayed and
suggestion boxes are clearly visible in the banking halls, other mechanisms like paying damages
to infringed customers by the bank, lack of joint meetings with customers, lack of sending
apology letters to customers, insufficient surveys on customers’ accounts are very poor. This
leads customer dissatisfaction and may infringe on corporate Image of the Institution.
5.2.3 Objective 3: To examine the relationship between customer complaints settlement and corporate Image of financial institution in Uganda. Further findings indicated that there was a great relationship between customer complaints
settlement and corporate image of financial institutions as the analysis showed a 0.789 which
indicated a very strong relationship. From the responses of respondents, it revealed that unless
customer complaints such as high loan interest rate, low grace periods poor customer care,
unfavorable loan conditions, turnaround time, poor pay and remuneration package for staff and
48
lack of continuous staff training are brought to right, the bank will portray poor image in the
public.
5.3.0 RECOMMENDATIONSFrom the results obtained by the researcher, it showed that there is need to start aggressively
soliciting complaints to keep companies profitable. The researcher’s views have emphasized the
inevitability of bank customer complaints as well as underscore the bank’s search for profits.
This suggests that banks should strive to balance their customer satisfaction objectives and those
profit makings. No bank can be praised for striving to achieve one of the objectives at the
expense of the others.
The findings of the researcher according to the Complaints Assessment specification, a 360
degree feedback should be maintained among the stakeholders and this includes the feedback
from not only customers but also from internal employees. Feedback plays an important role in
any service industry. Feedback from customers can be taken written, verbally or online to help
the bank to take correct steps. If employees are not satisfied then they can’t give efficient
services to the customers. The 360 degree approach not only helps banks to retain customers but
also its employees.
A bank's image is based upon a customer's unique experience. And the customers’ experience,
in turn, drives his or her recommendations: both positive and negative. So, a bank literally lives
or dies based upon how well it treats customers. And that is as it should be.
Your existing customers are among the most important assets of your business - they have
already chosen you instead of your competitors. Keeping their custom costs far less than
attracting new business, so it's worth taking steps to make sure that they are satisfied with the
service they receive. In one way or another, this will boost the corporate image and customer
satisfaction of your business.
49
AREAS FOR FURTHER RESEARCH
The study only focused on customer complaint settlement and its effect on corporate image of
financial Institution. However there other factors that may affect corporate image of an
institution like, market research, office automation, customer satisfaction and other area that
have effect on corporate image
50
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Bolton, R.N. and Drew, J.H. (1991, "A multistage model of customers' assessment ofservice quality and value", Journal of Consumer Research, Vol. 54, April, pp. 69-82.
Charles J formbrun (1996) Ist edition Realizing value from corporate Image; Harvard business
School Press
Mckensey. (2004) Valuable customer satisfaction and loyalty,
Microfinance Research center
FSA 2010, Complaints management journal. (Treating customers fairly considerations)
H. Harrington (2000), Business Process Improvement: (The Breakthrough Strategy for Total
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Thomas, L (1997), Money, banking and Financial Markets, McGraw Hill, New york
Hirschman, A.O. ,(1970) "Exit, voice, and loyalty: responses to decline in firms",Organizations, and States, Harvard University Press, Cambridge, MA.
Kayiizi. The New vision, Monday 15th December 2008 pg 22
Koetler,P. (2000) Marketing Management, New Jersey, Prentice Hall
Ladu, the Sunday monitor 20th September 2009 pg 22 “High interest rates hurting
economy”
Mckensey. (2004) Valuable customer satisfaction and loyalty, Microfinance Research center
Sharpe, S.A (1990) Asymmetric Information ,Bank Lending &Implicit Contacts: A stylized
Model of customer Relationships, journal on Finance
SMAS, (2000), Annual service in Britain Survey, London
Shankar,V. (2007)Banking in India, Vikas, New Delhi
Tang Weiwei 2007, Management Science and Engineering (Research paper) Vol.1 No.2.
Uganda Bankers Association, UBA (2008) Report
www.corporate-images.com
www.jounalofaccountsncy.com : how to profit by safeguarding privacy.
www.goldbergsegalla.com: face book firing case settles with NLRB feb 9th 2011
Why Is it Important to Understand the Underlying Causes of Customer Complaints? | eHow.com
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APPENDIX I
QUESTIONAIRE FOR CUSTOMERS.
I am carrying out a study on “resolving customer complaints and corporate image of
financial institutions in Uganda” as requirement for the partial fulfillment for the award of a
Bachelors degree in commerce of Makerere University. The purpose of this questionnaire is
purely academic. The data sought shall be purely for the research/ study purposes only and will
therefore be treated with anonymity and confidentiality. You have been chosen as a respondent
because of the knowledge and information that you have in reference to the topic.
SECTION A.
Bio data
SEX: Male Female
For how long have you been a customer of Equity bank?
a) 1 year b) 2years
c) 2-3 yrs c) more than 3 years.
How did you get to know about Equity bank?
A) Press B) Through a friend
C) Others (specify)…………………………………
Level of Education
i) Secondary ii) Diploma
iii) Degree iv) Post Graduate
v) Others (specify)………………
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SECTION BPlease use 1 if you strongly agree, 2 if you agree, 3 if you strongly disagree, 4 if you disagree, 5 if not sure for the comments below.
1 2 3 4 5Customer complaintsa) High Interest rateb) No grace period c) Unfavorable loan terms and conditionsd) Poor customer caree) Getting a loan takes a lot of time and procedures.f) They do understand when I cannot meet my repayments.g) They make unauthorized transactionsh) They require savings with them to access a loan.i) They have unfriendly staff.j) Loan processing is costly.k) long queues in the banking halls l) Untrustworthy staff.
Mechanisms for handling customer complaints.1 2 3 4 5
a) The complaint handling mechanism is good.b) The bank pays damages inflicted on the customers.c) The bank send s apology letters to customersd) The bank holds joint meetings with clients who have complaints.e) The bank carries out surveys on customer complaints.f) The bank has well displayed suggestion boxes.g) The bank has well displayed complaint books.
Relationship between customer complaints and the bank’s corporate image.1 2 3 4 5
a) People talk fairly well about the bank.b) Would you recommend a friend to open up an account?c) The bank has good products for customersd) The bank has many branches all over the country
What would you recommend the bank management to improve as a measure of improving its service provision?
………………………………………………………………………………………………….
53
APPENDIX II
QUESTIONAIRE FOR STAFF.
I am carrying out a study on “resolving customer complaints and corporate image of
financial institutions in Uganda” as requirement for the partial fulfillment for the award of a
Bachelors degree of Bachelor of commerce of Makerere University. The purpose of this
questionnaire is purely academic. The data sought shall be purely for the research/ study
purposes only and will therefore be treated with anonymity and confidentiality. You have been
chosen as a respondent because of the knowledge and information that you have in reference to
the topic.
SECTION A.
Bio data
SEX: Male Female
For how long have you worked with Equity bank?
a) Less than a year b) 1-2years
c) 2-3 yrs c) more than 4 years.
Level of Education
i) Secondary ii) Diploma
iii) Degree iv) Post Graduate
v) Others (Specify)………………
Which department do you work in?
a) Operations b) Teller
c) Credit d) Management
Do the customers you serve ever complain about the bank’s services?
a) No they don’t b) Rarely
c) Most of the time d) they never
54
Please use 1 if you strongly agree, 2 if you agree, 3 if you strongly disagree, 4 if you disagree, 5 if not sure for the comments below.
1 2 3 4 5Customer complaintsa) High Interest rate for staff loansb) Your ATM is always on at your branch c) Unfavorable loan terms and conditions for staffd) Getting a loan takes a lot of time and procedures.e) They do understand when I cannot meet my repayments.f) long queues in the banking halls
Mechanism for handling customer complaints.1 2 3 4 5
a) There is enough customer care staff.b) The bank pays staff well.c) The bank trains it staff more often d) The bank holds joint meetings with clients who have complaints.e) The bank carries out surveys on customer complaints.f) The bank has well displayed suggestion boxes.g) The bank handles staff conflicts amicably.
Relationship between customer complaints and the bank’s corporate image.1 2 3 4 5
a) Staff have accounts in other banksb) The bank has a good a remuneration packagec) The bank participates in community workd) The bank strives hard to keep its reputation by improving its services.
What would you recommend the bank management to improve as a measure of improving its service provision?
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
55