The Effect of Perceived Bank Charges on Bank Loans on Customers Switching Behavior in AKIBA Commercial Bank in Dar Es Salaam City, Tanzania.

Abstract

This study was conducted at Akiba Commercial Bank in Dar es Salaam City, Tanzania to determine the effect of perceived bank charges on customers switching behavior. The study used a cross-sectional research design whereby a questionnaire was administered to 100 AKIBA Commercial Bank customers. A cross sectional study was adopted to collect information from 100 customers of the Akiba Commercial Bank PLC in Dar es Salaam City. A binary logistic regression was employed for data analysis whereas the findings analyzed are presented in form of text and tables. The results showed that customer switching behavior is positively and significantly influenced by interest rates and processing costs on loans. In order to promote customer retention and attract new clients, the study recommends to the bank administration to take into account lowering lending interest rates, particularly for price sensitive customers.