Credit Policy and Customer Satisfaction in Financial Institution A Case Study of Cairo International Bank, Kampala- Uganda

TABLE OF CONTENTS

DECLARATION

APPROVAL

ACKNOWLEDGEMENT jjj

DEDICATION iv

TABLE OF CONTENTS v

LIST OF TABLES viii

LIST OF FIGURES ix

ABSTRACT x

CHAPTER ONE 1

1.0 Introduction 1

1.1 Background of the study 1

1.2 Statement of the problem 2

1.3 Purpose of the study 3

1.4 Objectives of the study 3

1.5 Research questions 3

1.6.0 Scope of the study 3

1.6.1 Geographical scope 3

1.6.2 Time scope 3

1.6.3 Subject scopeS 4

1.7 Significance of the study 4

1.8 Key Operational Terms 4

1.8.1 Credit policy 4

1.8.2 Customer satisfaction 4

1.8.3 Customer loyalty 4

1.9 Conceptual framework s

CHAPTER TWO 6

LITERATURE REVIEW 6

2.0 Introduction 6

2.1 Financial sector in Uganda 6

2.2 Credit Policy Conceptualization 7

2.3 Key elements of a good Credit Policy 8

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2.3.1 Credit standards .8

2.3.2 Credit terms 9

2.3.3 Collection policy 10

2.4 Factors that Determine Customer Satisfaction 10

2.4.1 Valuing and appreciating customers 10

2.4.2 Product performance or Service quality 11

2.4.3 Customer service 11

2.4.4 Meeting! exceeding expectations (customer expectations) 11

2.4.5 Company-customer relationship 11

2.4.6 Addressing customers’ complaints 12

2.5 Relationship between Credit Policy and Customer Satisfaction 12

CHAPTER THREE 14

METHODOLOGY 14

3.1 Introduction 14

3.2 Research Design 14

3.3 The study population 14

3.4 Sample size 14

3.5 Sampling technique 15

3.6 Sources of data 15

3.6 Methods of Data Collection 15

3.6.1 Interview Guide 15

3.6.2 Questionnaire 16

3.6.3 Observation schedule 16

3.6.4 Documentary study and desk research methods; 16

3.7 Data Analysis and presentation; 16

3.8 Variables of the study; 17

3.9 Validation of tools 17

3.10 Data collection process 17

3.11 Limitation of the study 17

CHAPTER FOUR 19

DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF THE FINDINGS 19

4.0 Introduction; 19

vi

4.1 Presentation of findings about the background information of the respondents 19

4.1.1 Gender of the respondents 19

4.1.2 Age bracket of the respondents 20

4.1.3 Distribution of departments of the respondents 21

4.2 Presentation of findings about the Key Elements of a good credit policy for a bank 21

4.2.1 Existence of credit policies in place to cater for customers borrowing 22

4.2.2 Credit policies applied in Cairo Bank Ltd 22

4.2.3. The impact of the credit policy on the availability of credit to customers 25

4.2.4 Key elements that should be initiated in the credit policies of Cairo Bank Ltd 26

4.3 Identifying the major factors that determine the bank’s customer satisfaction 27

4.3.2 Key determinants of customer satisfaction in Cairo Bank Ltd 29

4.3.3 How the determinants of customer satisfaction measured 30

4.4 The relationship between credit policy and customer satisfaction in the banking sector 31

4.4.1 How the Bank’s credit policy affects its customer satisfaction 32

4.4.2 Understanding whether effect of credit policy on customer satisfaction can be

improved 33

4.4.3 What should be done so as to improve on impact of credit policy on customer

satisfaction 34

CHAPTER FIVE 35

DISCUSSIONS, CONCLUSION AND RECOMMENDATIONS 35

5.0 Introduction 35

5.1.1 On establishing the key elements of credit policy for a bank 35

5.1.2 On identifying the major factors that determine bank’s customer satisfaction 35

5.1.3 To examine the relationship between credit policy and customer satisfaction in banking

sector 36

5.4 Suggested areas of further study 38

REFERENCES 39

APPENDIX 1: RESEARCH QUESTIONNAIRE 42