Identifying Factors Influencing Selection of Banks by Customers in Rwanda: Principal Components Analysis Approach

Ntaganzwa Joseph, Dr. Joseph K. Mung’atu


Nowadays, with the presence of the many financial institutions, customers have the chance of choosing among variety of products and services and they are concerned towards the value of money. Although many studies on the selection of bank have been conducted in many countries and in different segments but the findings of such studies cannot be applicable to all countries of the world due to the difference in cultural, political, economic and legal atmosphere. The aim of this study is to identify the most important factors that influencing customers’ choice in respect of selecting a bank by customers in Rwanda. The study population is consisted of all the active customers of the ten licensed commercial banks existed at the end of 2014. This study relied on 40 selection factors extracted from relevant literature, personal experience, and the responses from some bank officials and customers given in the pilot test. A convenience (non-probability) sample of 400 customers has been selected to collect the primary data through a structured questionnaire designed in the scales of 5 point Likert-type ranging from 1 ‘strongly disagree’ to 5 ‘strongly agree’ and 325 respondents(which represents 8 observations per variable) have correctly completed the questionnaire. Principal components analysis approach and SPSS statistical software version 20 for Windows have been used to analyze the data and hence identify the factors that influence mostly customers to select banks to patronize.

The findings for the total sample indicate that the bank selection decision is based primarily on twelve selection criteria following this order: The Appearance of the building, social influences, financial benefits, and availability of the bank in many places, Customer care, Time for delivering services, Convenience- Location, Assurance, variety of products, professionalism, brand name and lastly Recommendation of employer.  Theoretically, this study fills the important gap in literature and practically, Exploring this question will help all competitors in banking sector small and large to prepare some appropriate banking marketing strategies to invite new customers, to maintain their customers and to retain the existing customers.


bank selection; Rwanda; principal components; Availability of ATM.

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