Raphael Owino Eden

 INFLUENCE OF AGENCY BANKING SERVICES ON CUSTOMER SATISFACTION: A CASE OF KENYA COMMERCIAL BANK AGENT SYSTEM IN ONGATA RONGAI, KENYA BY EDEN RAPHAEL OWINO PATRICK Research Project Proposal Submitted in Partial Fulfillment for Requirements of The Award of Degree of Masters of Art in Project Planning and Management of The University of Nairobi. 2014 DECLARATION This Research Project Proposal is my original work and to the best of my knowledge, it has not been presented in this or any other University for the award of a degree. __________________________________ SignatureDate Raphael Owino Patrick Eden L50/77731/2012 This Research Project Proposal has been submitted for examination with my approval as the University supervisor. ____________________________________ Signature Date Mrs. HellenKabue Part-Time Lecturer Department of Extra Mural Studies DEDICATION This Research Project proposal is dedicated to my son, Michael and my wife, Milcah Nganga, for instilling in me love, patience and whose support, encouragement, strength, determination, knowledge, wisdom, patience and love has propelled me in this endeavor. THIS PROPOSAL IS DEDICATED TO MY GOD WHO REIGNS FOREVER. ACKNOWLEDGEMENT First, I thank my supervisors, Mrs. Helen Kabue, and Mrs Florence Musalia for taking me through, diligently, for her guidance, advice, support, patience and making this work a success, Second, I would also like to thank all my lecturers and colleagues throughout the study period, for their valuable contribution in my study. Finally, I appreciate the school of continuing and distance education, university of Nairobi for providing me with the resources to undertake this study. TABLE OF CONTENT Table of Content Page DECLARATION……………………………………………………….…………….……..IIDEDICATION………………………..……………………….....................................……III ACKNOWLEDGEMENT..………………………………………………………….….…IV TABLE OF CONTENT..….………………………………………………………………..V LIST OF TABLES………………………………………………………………………..VIII LIST OF FIGURES………………………………………………………………………..IX ABBREVIATIONS AND ACRONYMS…….………………………………….…....…....X ABSTRACT…………..…………………...………………………………………....…..…XI CHAPTER ONE: INTRODUCTION…………………………………..……………...…..1 1.1Background of the study………………………………………………………….….…....1 1.1.1 Inception of Banking……………………….………………………......………...…….2 1.1.2Agency Banking ………………………….…………………………………….……....3 1.2. Statement of the Problem ………………………………………….……….……....…....3 1.3 Purpose of the study………………………………………………………………….......5 1.4 Objectives of the study………………………………………………………….…..…....5 1.5 Research questions…………………………………………………………….….….…..5 1.6. Significance of the study……………………………..…………………….…...…….....6 1.7 Delimitation of The Study………………………………………………………………..6 1.8 Limitation of the study………………………..……………………………………….....7 1.9 Assumptions of the study…..…………….…………………………………….…….......7 1.10 Definitions Of Terms..………………………………………….…………….………...8 1.11 Organization of the study………………….……………...………………….…….…...9 CHAPTER TWO: LITERATURE REVIEW……………………..…………..……...…10 2.1 Introduction.………………………………………………………….……....…...….....10 2.2. Concept Customer satisfaction in the banking industry.………………..……………...10 2.2.1. Evaluation of Agent Banking Models in different countries.......................................13 2.2.2 Regulatory Framework of Agency Banking In Kenya…………….………..….….....14 2.2.3 Role of Agency Banking in Economic Growth………..……….…………..….……..15 2.3. Convenience on Customer Satisfaction in Agency Banking …………………...….....16 2.4. Service Value on Customer Satisfaction in Agency Banking .......................................16 2.5. Service-Responsiveness on Customer Satisfaction in Agency Banking .......................17 2.6. Service Quality on Customer Satisfaction in Agency Banking .....................................18 2.7. Theoretical Framework…………………………………..…………..…….……….….19 2.7.1 Stimulus Organism-Response Theory .........................................................................19 2.7.2 Disconfirmation Theory..............................................................................................19 2.7. 3. Innovation Diffusion Theory………….…………………………………….…...…20 2.8 Models of Branchless Banking and challenges…….………………..………...………20 2.8.1. Bank focused model ………………………………...………………………..……..20 2.8.2. Bank led Model…………………………...………………………………………....21 2.8.3 Non-Bank led Theory……………….……………………………………....………..21 2.8.4 Risks and Challenges in Agency Banking………………………………....………...21 2.9 Conceptual Framework……………………………..……………………...…………..22 2.10 Summary of Chapter Two………….…………………………………...…………….23 CHAPTER THREE: RESEARCH METHODOLOGY………………...…………..…24 3.1 Introduction………………………………………....…………………...……...……..24 3.2 Research Design……………………………………………...………...………...…....24 3.3 Target Population……………………………………..………………...….……...…..25 3.4 Sample Design and sampling procedure .....................................................................25 3.5 Sample size ....................................................................................................................26 3.6 Data Collection Tools and Techniques………………………………...…….………...27 3.6.1 Questionnaires……………………………...………………………...…….………..27 3.6.2 Reports from the Bank………………………………………...……..…….………..28 3.7 Pilot Testing, Reliability and Validity of the research instruments.....……………......28 3.7.1 Pilot Testing of the research instrument......................................................................28 3.7.2Validity of the research instrument..............................................................................28 3.7.3Reliability of the research instrument..........................................................................29 3.8 Data Analysis Techniques…...……………………………………...………….……..29 3.9. Ethical Consideration……………………………………………...………………….30 3.10 Operationalization of Variables…………...………………………….……...……....30 REFERENCES……………………………………...…………………………..………...31 APPENDICES APPENDIX I:QUESTIONNAIRE………………………………………..……..…........39 APPENDIX II: WORK PLAN…………………………..…………….………..…….….45 APPENDIX III BUDGET…………………….………………….……………………….46 LIST OF TABLES LIST OF FIGURES page Figure 1: Conceptual Framework……………………………………………………………..22 ABBREVIATIONS AND ACRONYMS ATM Automated Teller Machine CGAP Consultative Group to Assist the Poor EFInA Enhancing Financial Innovation & Access KCB Kenya Commercial Bank KYC Know-Your-Customer MFI Microfinance Institution POS Point-of-Sale PCs Personal Computer SPSS Statistical Package for Social science CBK Central Bank of Kenya IEBC Independent Electoral and Boundaries Commission USA United State of America ABSTRACT This study seeks to analyze influence of agency banking on customer satisfaction, with bias to Kenya commercial Bank, Ongata Rongai. Kenya Commercial Bank has been aggressive in fulfilling its financial objectives and remaining competitive in the market via regional expansion, and seeking to create a holding company, among other strategies such as mobile banking, agency banking, corporate responsibilities (KCB safari rally),among these strategies, the bank is keen on creating agent banking system in various areas as a strategy to decongest the banking halls, widen its market and to enhance client proximity hence taking the financial services closer to the clients. Despite these worthwhile efforts, the usage of agency has been slow and some clients in these targeted areas prefer to get the service from other sources like ‘Mpesa’ outlets, hence further intensifying the paradox. The aim of this study is to find out the Influence of Agency Banking Services on Customer Satisfaction: a case of Kenya Commercial Bank Agent System in Ongata Rongai, Kenya. By focusing on the following variables; Convenience on Customer Satisfaction in Agency Banking, Service Value on Customer Satisfaction in Agency Banking, Service-Responsiveness on Customer Satisfaction in Agency Banking, and Service Quality on Customer Satisfaction in Agency Banking . The main objective of the study will be to identify influence of Agency Banking Services on Customer Satisfaction in Ongata Rongai under the Kenya Commercial Bank, Rongai Branch. A sample of three hundred and eighty–one respondents (381) will be used in the study from the target population of over 50,000 customers. A self-administered open and closed ended questionnaire will be utilized in collecting data from the field. Data collected will be analyzed using descriptive statistics (frequencies and percentages) and inferential statistics (Pearson correlation). The findings will then be presented in the form of tables. This information will be useful to the government, commercial banks and other stakeholders interested in this strategy. CHAPTER ONE INTRODUCTION 1.1 Background of the study The world bank,(as cited in Ounza, 2012) estimates that there are over 7000 microfinance institutions in the world offering services to more than 16 million people in the developing continents, others have innovated the use of branchless banking: mobile banking, automated teller machine(ATM) ,point of Sale(POS),and now agency banking outlets. By so doing they reach a wider scope of clients, reduce their transaction costs, increase access to financial services by the poor in remote areas while making use of ICT. The recognition by the government of Kenya on the role played by ICT on the development of the economy lays the basis of agency banking, and is an imperative part in the implementation of the vision 2030, which is the country’s blueprint for development. The main key goal of the vision is to promote Kenya to be one of the top investment destinations in Africa by 2030, which is to be attained by the three pillars of this vision: social, economical, and political pillars. Financial growth is covered in the economic pillar which targets wider reach of the unbanked Kenyans and attaining GDP of 10% per annum (vision 2030). The banking sector aims to achieve this through innovations (ICT) and use of ‘branchless banking’. Ounza (2009) notes that a number of firms or organizations both governmental and non-governmental organizations are evolving towards the use of information and communication technology (ICT) in their operations, which are characterized by work across geographical boundaries, real time transactions, less shelf life of goods and the use of personnel in different regions for the same services and it unbolt opportunities which in turn transform the efficiency and effectiveness of organizations. Further to explain this is the influence it has had on education in colleges and universities, my experience on processes such as recruitment, learning, applications, payment,, library operations, meetings, lecturers, and workshops are done using the new innovations in ICT for effective performance of management functions like planning, leading ,control ,organization, and motivation. Peng (2008), notes that firms use ICT Innovations as corporate strategies that assists in the focusing of the overall picture rather seeing the ‘forest’ instead of trees, which would basically refer to business level strategy. Some of the contents of corporate strategy would involve diversification, acquisition, corporate governance, corporate social responsibility and structures and learning. Diversification which is either product related or unrelated, is the channel through which agency banking as being pegged(product diversification) subsequently it affects a firm’s performance in reducing risks and synergy. According to Johnson and scholes (2003) this is the direction and scope in which an organization over a period of time- could be long or short- equips an organization to use its resources effectively in a particular changing environment and fulfilling stakeholders’ expectations. A company’s strategy consists of the business methods and initiatives it undertakes to attract customers and fulfill their expectations, to withstand competitive pressures and to strengthen its market position. These strategies provide opportunities for the organization to respond to the various challenges within its operating environment. The success of every organization is determined by its responsiveness to the customer needs. Some of the building blocks of strategy include spreading risks, clarity of vision, implementation, distinctiveness, values, and sustainability (katua, 2012) . There is the need for an organization to respond appropriately so as to mitigate risks, but most importantly to not miss any opportunity for business; agency banking is an innovation that a competitive financial institution wouldn’t want to miss given the complexity and changing character of customers. This project intends to find out the influence of agency banking on customer satisfaction; case of Kenya commercial bank, Rongai Branch. 1.1.1Inception of Banking Bank activities in the world, can be marked out from the year 1694 with the founding of the bank of England. It was started by a small number of individuals who were in fact money lenders with an aim of lending money at interest. While in Kenya, banking started in the year 1896 with the National Bank of India opening its first branch. Standard Chartered Bank opened its first branches in Mombasa and Nairobi in January 1911. The Kenya Commercial Bank was established in 1958 as a result of Grindlays Bank of Britain merging with the National Bank of India. The Cooperative Bank of Kenya was established in 1965 for the express purpose of providing financial services to Co-operative societies. Three years later, National Bank of Kenya (NBK) was incorporated (Ojung’a 2005). There is about one Automated Teller Machine (ATM) for every 100, 000 people in Kenya according to a paper presented at a South African university by Central Bank of Kenya (CBK) official. Currently, there are 43 commercial banks for 33 million Kenyans Banks have largely implemented service delivery technology as a way of augmenting the services traditionally provided by bank personnel. The Kenyan banking sector comprised 43 commercial banks, 1 mortgage finance company, 9 deposit taking microfinance institutions, 7 representative offices of foreign banks, 106 foreign exchange bureaus and 2 credit reference bureaus during the quarter ended September 30, 2013. The sector registered improved performance with the size of assets standing at Ksh. 2.62 trillion, loans & advances worth Ksh. 1.52 trillion, while the deposit base was Ksh .1.91 trillion and profit before tax of Ksh. 92.5 billion as at 30th September 2013.(Central Bank of Kenya,-. Agency Banking The agency banking model   which was launched in 2010 continued to contribute to increased access to banking services. As at 30th September 2013, CBK had authorized 13 commercial banks to offer banking services through third parties (agents). Since 2010, a total of 21,816 agents had been contracted facilitating Over 69.2 million transactions valued at Ksh. 366.8 billion. In comparison with June 2013, 13 banks had been authorized and had contracted 19,649 active agents, which facilitated over 58.6 million transactions valued at Ksh. 310.5 billion. The number of banking transactions undertaken through agents increased from 10.2 million registered in the quarter ending June 2013 to 10.6 million transactions registered in the quarter ending September 2013. However, the value of banking transactions undertaken through agents decreased from Ksh. 60.4 billion to Ksh. 56.3 billion over the same period, (Kenya Monthly Economic Review, July 2013). Agent banking refers to the delivery of financial services outside conventional bank branches and that entails the use of non-bank retail outlets that rely on technologies such as point-of-sale (POS) terminals, or mobile phones, for real-time transaction processing. A banking agent is a retail or postal outlet contracted by a financial institution or a mobile network operator to process clients’ transactions. Rather than a branch teller, it is the owner or an employee of the retail outlet who conducts the transaction and lets clients deposit, withdraw, and transfer funds, pay their bills, inquire about an account balance, or receive government benefits or a direct deposit from their employer. Banking agents can be pharmacies, supermarkets, convenience stores, lottery outlets, post offices, and many more,(Central Bank of Kenya, July 2013). 1.2 Statement of the Problem Banking services for a long time have been known to be characterized by long queues and low turnaround time ,as seen in many banks in recent past, for example in national bank, post bank, and Kenya commercial bank. These slow operations often resulted in long queues, high costs, wastages, due to paper protocol and bureaucracy making it hard for timely services. Therefore any form of improvement to enhance efficiency in the banking sector is very much welcomed through the adoption of new technology. The consultative Group to Assist the poor,(CGAP,2006) defines branchless banking(agency banking) as the delivery of financial services outside conventional bank branches making use of information and communications technologies(point of sale, mobile phones,) and non-banks retail agents such as shops ,pharmacies, supermarkets and retail outlets . Agency banking is a new strategy commercial banks are employing to increase their market share and offer banking services to their clients in varied places. Implementation of such strategies results both from the need to reduce the cost of delivering service primarily through personnel and the corresponding need to meet the challenge posed by technologically innovative competitors (Byers and Lederer, 2001; Howcraft and Beckett, 1996; Kelley, 1989). Changes in the banking industry such as those resulting from deregulation, rapid global networking, and the rise in personal wealth have thus made the implementation of sophisticated delivery systems (e.g. online and telephone banking, remote site automated teller machines, etc.) a strategic necessity in many cases (Lewis et al., 1994). Since its launch in 2010,agency banking has contributed to the economic growth of Kenya, according to CBK, the number of banking transactions undertaken through agents increased from 10.2 million registered in the quarter ending June 2013 to 10.6 million transactions registered in the quarter ending September 2013. Despite report by CBK about increase in agent activity however through observation its uptake in KCB agent outlets in Ongata Rongai as remained low, the rate of acceptance by clients in Ongata Rongai has not communicated what is indicated by the CBK report. Some of the benefits from agency banking is low operational costs, improved efficiency, effectiveness of operations and the customer benefits from the close proximity to service outlet, without going to the branches, and faster services,no queues. However observing the branch, it is still characterized by queues in banking halls and minimal advocacy of agency banking by customers. KCB bank hasendeavoured to remain competitive in the market via regional expansion, and seeking to create a holding company, among other strategies such as mobile banking, agency banking, corporate responsibilities (KCB safari rally),among these strategies, the bank is keen on creating agent banking system in various areas as a strategy to decongest the banking halls, widen its market and to enhance client proximity hence taking the financial services closer to the clients. Survey conducted by KPMG in Africa,(2013) 99 percent of respondents said that they still use branches,however ATM’s are becoming important in african banking systems; 85% respondents say they use ATM’s and saying that they use them on weekly basis compare to Despite these worthwhile efforts, by the method of observation in Ongata Rongai, the usage of agency has been slow and some clients in these targeted areas prefer to get the service from other sources like ‘Mpesa’ outlets, hence further intensifying the paradox. This study seeks to study the influence of agency banking services on customer satisfaction due to the varied reasons given above as why there seems to be low agent activity in relation to the customers. This topic has not been widely researched before in kenya, Wanjugu,(2012) did a study on Factors influencing Access to Agency Banking, while Kyalo,(2012) studied the Factors affecting customer’s willingness to Adopt Mobile Phone Banking at National Bank and Kirimi,(2011) did a study on the Extend of Implementation of Agency Banking. 1.3 Purpose of the Study The study intends to establish the influence of agency banking on customer satisfaction in the banking sector, more specifically in Ongata Rongai, Kajiado North under the Kenya Commercial Bank Agents in the same region. 1.4 Objectives of the Study This research study will be guided by the following objectives: 1) To determine the influence of convenience of agency banking services on customer satisfaction under the Kenya Commercial Bank, Rongai Branch. 2) To establish the influence of service value on customer satisfaction in agency banking services under the Kenya Commercial Bank, Rongai Branch. 3) To establish the influence of service responsiveness on customer satisfaction in agency banking services under the Kenya Commercial Bank, Rongai Branch. 4) To establish the influence of service quality on customer satisfaction in agency banking services under the Kenya Commercial Bank, Rongai Branch. 1.5 Research Questions 1. To what extent does convenience of agency banking services has effect on customer satisfaction under the Kenya Commercial Bank, Rongai Branch? 2. How does service value affect customer satisfaction in agency banking services under the Kenya Commercial Bank, Rongai Branch under the Kenya Commercial Bank, Rongai Branch? 3. How does responsiveness contribute to customer satisfaction in agency banking services under the Kenya Commercial Bank, Rongai Branch? 4. To what extent does service quality influence customer satisfaction in agency bankingservices under the Kenya Commercial Bank, Rongai Branch? 1.6. Significance of the Study The management of Kenya Commercial Bank Ltd will be able to know the challenges that affect customer satisfaction with agency banking and come up with measures to mitigate them, thus maintaining competitive advantage over other competititors. The financial institutions will also be able to implement innovative and competitive strategies and capabilities, which in turn will enable such firms to outperform each other for the benefit of the customer, in this case when two ‘bulls’ are fighting, the ‘grass’ benefits greatly, so I shall encourage this fights for the sake of the customer. The study shall have an academic value to those interested in agency banking studies with the aim of establishing better operations of the same so as to attract customers and ‘remove’ them from or rather decongest the banks, create jobs for many Kenyans, reduce the cost of financial transaction and inclusion in Kenya on the customers, participate in achieving the vision 2030 economic pillar, of increased financial services and inclusion to many Kenyans. They will be able to relate the goings in the market with this study. This study shall be of value to the government, since it shall form an invaluable source of reference especially to the ministry of finance and central bank of Kenya, when coming up with policies to guide on the improving agency banking model within the financial institutions, since it is relatively a new concept that is about to realize its full potential if handled effectively and efficiently. 1.7 The Delimitation of the Study This study is to be carried out at Kenya Commercial Bank in Ongata Rongai, in relation to customer satisfaction influence on agency banking services to their customers in Nairobi, Kenya. The reasons for this choice are, it is within commuting zone to the capital city Nairobi, it has a cosmopolitan population which means it will have a representative pattern of customer behavior, it has student population staying within due to existence of colleges and universities in the locale, and there exists several major banks within the area such as KCB Bank, Barclays Bank, Family Bank, Kenya Commercial Bank, Cooperative Bank and Family Bank. 1.8 Limitation of the Study First, The study will be restricted to current clients of KCB banking agents in Rongai Branch. Secondly The sample size is also to be limited by the limited resources which are likely to affect the robustness of the results, third not all the respondents are expected to participate in the study, fourth some of the respondents may not want or will to divulge information however this is to be mitigated by offering assurance of the purpose of the study and the confidentiality involved therein and finally using one branch may not give the overall picture of the influence of agency banking on customer satisfaction this is to be mitigated by having a wider questionnaire that can capture the overall reaction as much as possible. 1.9 Assumptions of the study Some of the assumptions held are, first, the variables used in the study are constant; the variables will not change over the period of research. Secondly that the responses given were acceptable, the Kenya Commercial Bank has a big market share in Ongata Rongai, compared to the other banks, and finally that the Kenya Commercial Bank has been given authority by the regulator(CBK) to operate Agency Banking and adopts the use of technological advancement. 1.10Definition of Terms Convenience The state of been suitable or opportune in relation to time and situation. Customer satisfaction Customer satisfaction is a person’s feeling of pleasure or isappointment resulting from comparing a product’s perceived performance in relation to his or her expectations. Institutional culture The customs, rituals, and values shared by the members of KCB Bank, that has to be accepted bynew members and perpetuated by Institutional indoctrination, actions, and leadership. Service quality This includes basic needs of performance,delivery time,features of the service or product,and can be controlled by the service or product provider. Service value The benefit the customer gets from the service or product in comparison to its cost,serving diverse populations,understanding cusomers,and value based service. Responsiveness To be measured on three areas ,speed of service,sensitivity to customer concerns,and awareness of changes in general needs of customers. Regulations by CBK Regulations and Guidelines issued by the Central Bank of Kenya subject Banks to certain requirements, restrictions and guidelines. This regulatory Structure creates transparency between banking institutions and the Individuals and corporations with whom they conduct business, among other things. 1.11. Organization of the Study This research project proposal is to be organized into five chapters; the first chapter deals with background of the study, objectives, research questions and relevance to our society. The second chapter is to illustrate with the use of related literature on the objectives, as captured in the conceptual framework, while the third chapter is to indicate the design methodology of the study highlighting research population, sampling design, sampling procedures, issues of validity and reliability,ethical consinderations, and operationalization of variables. The fourth part of this research is to deal with presentation, analysis, discussion of the study data or findings in regard to influence of agency banking on customer satisfaction. Finally in chapter five, gives the summary of the findings and recommendation. CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter reviews the studies related to this study. The following will be reviewed: The Concept of Customer Satisfaction in Banking Industry, Evaluating Agent Models in Different Countries, Regulatory Framework of Agency Banking In Kenya, Role of Agency Banking in Economic Growth and the variables under the study shall include, Convenience on Customer Satisfaction in Agency Banking, Service Value on Customer Satisfaction in Agency Banking, Service-Responsiveness on Customer Satisfaction in Agency Banking, and Service Quality on Customer Satisfaction in Agency Banking. The Theoretical Framework and Conceptual Framework will also be covered. 2.2. The Concept of Customer Satisfaction in the Banking Industry Quinn, (2003) defines a customer to mean the recipient to which a product or service is intended for, or anyone who receives that which is produced by an organization. From this we can then deduce that the citizens are the customers of the government, students are the customers of institutions and shoppers are the customers of retail or wholesale shops. The challenge however would be, according to Walker ,(2004) the continuous changing character of the customer expectations over time which seeks new products, services that can satisfy their needs, while institutions find it difficult to move with this ‘moving target’ ,due to other concerns or targets such as bottom line, quarterly results, costs, and staff turnover. Satisfying the customer is a priority in most businesses; banking, manufacturing, retail, wholesale, pharmaceutical, hospitality, and media industries all target greater share of the market, this therefore means that they have to focus their efforts on attracting the customers. Satisfied customers will market for the firm by providing positive word of mouth recommendation to friends and relatives but most importantly are likely to come back again-repeat customers, (Kotler et al, 1996). It would be important to describe the nature or character of service industry at the onset, Cooper, (1998), notes that the service product is intangible, meaning, that it cannot be easily evaluated or confirmed in advance of its use, it varies with situations and that services are heterogeneous in the manner that they are not the same each time they are executed. From this we can see the nature of service industry as a complex one yet it has a profound impact on service quality a customer experiences. So as to understand customer satisfaction, it would be important to describe it; Gronroos, (1990 ) as cited in katua, (2012), describes customer satisfaction as encompassing customer expectations and perceptions, while Kotler et al, (1990) notes that, it is how well the product or service meets the customer’s expectations. Thus Customer satisfaction is the most important issue in customer oriented business, and this emanates from a comparison process between the customer expectations and the perceived performance, If the perceived worth shall meet or surpass the customer’s expectations, and then the customer shall be seen as been well satisfied or delighted by the product or service, while if the perceived worth doesn’t meet or exceed the customers perception then s/he will not be satisfied. Crompton and MacKay,(1989) adds another angle to this; terming it a psychological outcome which comes from an experience which has expectations on one hand, informed by one’s past experience, word of mouth, needs, price and on the other hand, perceptions informed by total experience of cost, service delivery, needs meet, risk involved, customer’s mood . While Gandhi, (2013) says, banks world over are constantly confronted with growing regulatory costs and increasing demands for greater fairness and clarity in their interactions with customers, consequently due to this, many banks have changed their focus to their most important stakeholder-customer, on how to access and impress her through quality service, customer service, new product such mobile banking, internet banking otherwise known branchless banking. Juran‘s, (1989) quality concept of, ‘fitness for use’ was focused on acknowledging the importance of how beneficial a particular service or product is to the customer.It takes the user-based approach to quality in achieving customer satisfaction. Survey done by temporal and trout, (TARP) in 2001 gave some of the reasons why companies lose their markets; customer move to other places or die 4%, poor handling of customer complain 68%, customer search for more competitive price 9%, customer shifting to competitor brand was at 5%, this tell us where the customer focus on most, that they are easily convinced rather they value how they are treated at the point of contact with the service or product provider, (Khristianto et al 2012). Banking is a predominantly customer oriented business, subsequently it is imperative to evaluate the customer satisfaction ,an aspect which is becoming increasingly popular in this age, (Eggert, ulaga, 2002), and bringing about changes in different fields. It increases the revenues of research companies and also enables financial institutions to position themselves well in the market segment. Ravald and Gronroos, (1996), says that evaluation or measure of customer satisfaction equips the institution with the ability to predict the intentions to re-buy service or product. It therefore posits that customer satisfaction measurement ought not to be done for its sake or documentation sake but to entail strategies in managing customer-bank relationship towards success. Mattura, (1982) states that the relationship between banks and customers seems to be separate from all others due to it’s; first, unique financial products, which is at the supplier’s control even after sale and secondly the relationship is heavily dependent on trust , basing on the amount of information involved and the risks assumed during operations. According to studies done by Westlund and Fornell, (1993) an attention-grabbing observation is made in regard to how Customer satisfaction interaction with manufacturing and service sectors. In the manufacturing field customer satisfaction improvements interact towards profitability in a positive way, while for service companies the impact on return on assets (ROA) demands a balancing productivity and customer satisfaction to reach the best overall effects on profitability. The studies by westlund and Fornell, (1993) give a pointer to the impact of customer satisfaction on profitability, ROA, stock market performance, and productivity. Oliver, (1980) illustrates customer satisfaction as the feeling or attitude of a customer towards a product or service after it has been used, in other words it is meeting in full, one’s expectation. Unsatisfactory service rendered can affect the ability to convince another client about the services; subsequently it leads to a drop in customer satisfaction which can affect the productivity of the bank negatively, (Levesque, 1996). Codatte, (1987) makes an argument that a customer develops norms for product performance based on product general experience rather than from brand’s performance, determine the confirmation or disconfirmation process. However it is good to note the nature of a human customer which is always complex, since it is always changing times, preferences and priorities and does not remain static (Rajkamal,2008), this is one of the reasons that it is imperative to always conduct customer satisfaction measurement from time to time. In other nations middle-size companies, and public sector measure customer satisfaction of their products and services, through customers satisfaction indices (CSIs) seen in United States of America (American customer satisfaction index, ACSI), Sweden (Swedish customer satisfaction index, SCSI) and Germany (Deutsche Kundenbarometer, DK) even in United Kingdom(National Customer Satisfaction Index-UK) this enables companies to also benchmark with industry peers and best performing companies in the market and also assist marketers to know the driving factors in satisfaction and loyalty to their companies. it can be summarized as a cause and effect linkages whereby the customer expectations, quality are on one end and the customer complaints are on the end of the linkage. In Europe the use of indices was initiated at the beginning of 1999, (Westlund et al, 1998) so as to enable wide-ranging study on the interlinks between customer satisfaction, economic and financial data. Survey done on African banking customer satisfaction during June and December 2012 but released in April 2013 by KPMG, that focused on perceived quality of customer services delivery by the bank customers across 14 countries in Africa (Kenya included) it sought to find out the perceptions of customers with respect to services using the customer satisfaction index(CSI) which is simply a weight score on convenience, customer care, transactions methods, pricing and products and services. The general findings by KPMG was that several financial institutions had made gains despite the increase in commodity prices ,the reason to this could be that there was increased use of technological advances such as , Mpesa, automated teller machine (ATM), branchless banking, influx of international banks, deregulations across the continent, expansion of African banks, increase in competition by African banks which was changing the customer preferences, expectation and demands . Customer Focus: In Angola Banco Privado Atlantico was selected as the most customer focused bank, while in Nigeria GTBank took the lead followed by Zenith and Stanbic ,and in Kenya, the leading Bank in customers focus was CFC Stanbic followed by Kenya Commercial Bank, Ecobank, Cooperative and Post Banks respectively. The findings about mobile usage in Kenya was that About 33 percent of respondents in Kenya indicated that they use mobile payments and 40 percent of these respondents, use this service once in every two weeks and the majority of these users are high-income earners, with every 3 in 10 respondents in this category using this channel several times a week. Surprisingly, 47 percent of respondents within the 21-30 age group only use mobile payments once a month compared to 37 percent of those within the 41-55 age group that use this service once every two weeks, (KPMG,2013). 2.2.1Evaluation of Agent Banking Models in different Countries In Colombia, from August 2010 to July 2011, collections (of utility bill payments)have made up the majority of transactions (around 1.8 million in July 2011), followed by mandatory payments such as loan repayments and official government payments, suchas tax (over 800,000 in July 2011). There have usually been more withdrawals made than deposits, but the numbers of these two transaction types are consistently close. The numbers of credit applications, money transfers and opening of savings accounts are negligible. In terms of the value of transactions, deposits and withdrawals constitute the two highest transaction types, (both were around US$180,000 in July 2011), followed by mandatory payments and collections. Money transfers had the lowest value (consistently averaging around US$20,000 per month); (CGAP,2011). In Brazil in 2008, agents transacted 75% of the volume, (agents made 1.6 billiontransactions ) and 70% of the value, (agents transacted a total of US$105 billion) of total bill payments (Banco Central, quoted in CGAP, 2010); In Brazil, rural agents transact more deposits and withdrawals as a percentage of total transactions (38%) than their urban counterparts (8%) (CGAP -FGV-Planet, quoted in CGAP, 2010); In Brazil, although permitted to offer several types of services, less than 30% of agents actually handle bank accounts. Most specialise in receiving bill payments, which account for approximately 75% of all agent transactions (47% of which are utility bill payments). Withdrawals and deposits account for 12.6% and are nearly equally divided into savings and current accounts (including simplified accounts). Only 0.16% of transactions are account opening and 7.3% are government transfers (CGAP, 2010c); In Peru , agents carryout approximately 3.8 million transactions per month (45 million transactions in the year) ; In Peru in 2010, less than 50% of the total financial system transactions were conducted through traditional bank branches : ATMs and POS terminals accounted for 36% of total transactions, (SBS & CGAP, 2010); In India, an average of 8.4 deposits and 3.1 withdrawals were carried out by individual FINO, (a technology firm and one of the first pioneers of agent banking in India) agents each day in 2010:with 10,000 agents nationwide we can assume that approximately 84,000 deposits and 31,000 withdrawals are carried out each day The average deposit size was Rs. 175, (US$3.50) and the average withdrawal size was Rs. 368(US$7.39), per agent so we can assume that approximately Rs 15 million, (US$301,000)worth of deposits and Rs. 11 million (US$221,000) of withdrawals are being processed each day, (CGAP, 2010f); and In Kenya, MNOs’combined total transactions through mobile payments amounted to Ksh 2.45 billion, (US$24 million) per day or Ksh 76 billion (US$75 million)per month (Central Bank of Kenya, 2011). 2.2.2 Regulatory Framework of Agency Banking In Kenya. November, 2009, the Kenya government made improvements to the banking act, so as to include provisions on the usage of agents-agency banking- by financial institutions. This was due to the fact that the central bank of Kenya was regulating this model of using agents to transact on behalf of commercial banks on case by case basis, thus the need to make a regulatory framework of operation (Central Bank of Kenya, 2013). The amended law states that, “agency” is an “ entity contracted by financial institution and approved central bank of Kenya to provide the services of the institution on behalf of the institution, in such a manner as may be prescribed by the central bank.” (Finance bill, 2009). This enhances the use of third party agents by banks to provide banking services and also enhance the customer satisfaction by banks in face of increased competition in this sector. The central bank reserves the right to regulate implementation and operations of this model as law demands, banks also need to obtain annual approvals from CBK after submitting particular agents, their names, locations, commercial activities and a sample contract. Dias et al, (2010) notes in their study, that branchless banking affects different sectors of life for example ; In Kenya, M-PESA provides money transfer services and the equivalent of a small balance transaction account to more than 12 million customers through cell phones and a network of over 16,000 agents, by now its approximated to be handling over 36 billion daily in transaction inclusive of other modes of transactions. In Brazil, over 170,000 agent points, such as pharmacies, deliver a wide array of services on behalf of banks, processing approximately 2.5 billion transactions a year. Wal-Mart Bank in Mexico is using 1,000 Wal-Mart stores, (totaling 18,000 points of sale) as agents to offer its clients financial services, including deposits and payments. These are not isolated examples, but rather evidence of how transformational branchless banking is rapidly changing the access to finance landscape. Giving unbanked and underbanked people the opportunity to access a full range of needed formal financial services could be a significant step toward more equitable and efficient financial markets, ( Dias et al, 2010). 2.2.3 Role of Agency Banking in Economic Growth The growth of technology in the developing countries as led to the creation of agency banking which is an entity contracted by an institution e.g Equity Bank, (Equity Mashinani), Kenya Commercial Bank, (KCB Mtaani), Post Bank, (Benki Yangu) Cooperative Bank, (Co-op Kwa Jirani), and approved by central bank of Kenya to offer the services of the institution, (Central Bank Of Kenya, 2010). Some of the entities are partnerships, societies, cooperative societies, state corporations, sole proprietorships, partnership as granted by central bank of Kenya. CBK also bars Non –Governmental Organizations (NGOs), educational institutions and Forex bureaus as acting as agents. Agency banking does improve the economics of the respective institutions in comparison to institutions’ branches, particularly in focus to poor clients who need low-balance accounts and high transactions, (Podpiera,2008) According to Gardener, (2000) setting up agent cost 2% to 4% of the cost of branch cashier, still when operating at optimum level the cashier accrues 78% in fixed costs per transaction unlike 11% for POS enabled agents. Acquisition costs and know your customer, (KYC) costs are lower compared to branch operations. KPMG survey, (2013) and Tower group, Fiserve/M-Com Data, (2009), shows that transactional cost from branch as $4,call centre as $3.8,ATM as $0.9,mobile as $0.1 meaning that the cost of operations is lower in the using other channels other than the bank branches. The transaction cost for clients is pegged on reduced travel by clients especially in rural Africa where one has to travel over long distances, (kasekende, 2008). 2.3 Convenience on Customer Satisfaction in Agency Banking According to Rifkin, (1994) entails how consumers in the united states of America in southern California, have embraced concept of convenience in banking as initiated by union Bank inside selected supermarkets operated by Ralph’s Grocery company. This means convenience for customers and profitability for the banker,shopers at mega stores,groceries can conduct banking at their convenience. Study conducted inthe USA found out 63% of US adults would have bank account due to convenience,subsequently globally banks are becoming more innovative as per another study commissioned by Infosys and conducted by Efma,surveyed 148 banks in 66 countries,the study revealed that as global ecomy recovers many banks are turning to innovations as means of raising revenue,cutting costs thus creating convenience for the customer, (Teller Vision,2014). In africa the case for convenience would arise based on cost of building,unsteady incomes,unemployment,distance to bank branches and maintaining branches in rural areas thus the need to adapt low-value,high volume transactional environment with numerous points of access, (Financial Services Survey in Nigeria, 2010). Berger, (1998) emphasize that agents offer similar services as banks which range from cash deposits, withdrawals, disbursement, loan repayment,salary payment,transfer of funds,mini bank statements,balance inqury,cash payment of bills and cash deposits. The existence of a banking services within a location like a village,estate has a positive effect on business investment,women access to savings and income, (Dupas and Robinson.,2011). Survey conducted by KPMG in Africa, (2013) 99 percent of respondents said that they still use branches,however ATM’s are becoming important in african banking systems; 85% respondents say they use ATM’s and saying that they use them on weekly basis. Alternative channels have also attracted customer participation for example point of sale (POS) enjoys 69% usage while mobile banking in kenya has topped 50% usage,conclsion is that the acceptance of the new innovations across africa is still slow in most or some markets. 2.4 Service-Value on Customer Satisfaction in Agency Banking Cronin and Taylor ,(1992) in their analysis of the causal relationship between quality,customer satisfaction,and purchase intention found that service quality was an antecedent of consumer satisfaction,consumer satisfaction had significant effect on purchase intention. In analysis this then means that high service and customer satisfaction results in high level of purchase intentions. Wolfson, Tavor, and Mark, (2012) says that the heart of service is in the value it gives to the stakeholders. The sustainability of service has two dimensions of core value; which is the fundamental nature of that service and super value; replacing other solutions by a more appropriate one. For example when one to travel he has choice of using train, ‘bodaboda’, taxi or doing it by self. Shifting the service boundary direction either to self –service or super service will effect changes in the resource arrangement and effort of running the change however it may not change the service core business, ( Campbell, Maglio,Davis, 2011 ). This is to say that when the Kenya Commercial Bank is effecting change in using agent banking to its clients this doesn’t affect the banks core values but will affect resources being used to effect the change. Both the service provider and customer have to be responsible in discharging this relaionship for example the customer is expected to have in mind his/her economic,social,political,ecological state while the provider has to outline the areas being covered by the service, (Wolfson,Tavor,& Mark,2012). 2.5 Service Responsiveness on Customer Satisfaction in Agency Banking Study done by Parasuman,Zeithaml and Berry, (1985) on service quality estabblished ten parameters (reliability, responsiveness, competence, access, courtesy, communication, credibility , security, understanding and tangibles) but later research by them ,established five key areas from the ten ; tangibles,reliability,responsiveness,assurance and empathy. Result found out that the five ranked in this order;reliability,responsiveness,assurance,and empathy but acording to Johnston, (1995) identified responsiveness as the vital service quality factor. Bitner,Booms and Tetreault, (1990) identified employees willingness to respond to problems and employee responsiveness to customer needs as key to service delivery. Thus objectives of responsive banking shall cut customer waiting time,real time,recency,iirelevancy,reduce transaction time,cut costs and wastes through reduction in idle time,wastes and inefficiencies. The intention of responsive banking is to help prevent loss of customers by elimination of inefficiencies. This is better elaborated by KBC Group CEO,Johan Thijs during a press and anaylst conference in Brussels , (Johans,2012) giving the way forward; “KBC 2013 and beyond” , The macroeconomic environment, competitive landscape and regulatory situation and outlook remain challenging. Everyone needs to adapt. KBC is passionate about being the reference in bank-insurance in its core markets. After a thorough review, we decided at the Executive Committee to update our strategy. By building further on the strengths of the KBC group, our integrated bank-insurance business model which continued to perform through the cycle, and our skilled and professional employees, we enhanced our strategy by making clear business choices, optimizing the organizational structure of our group (taking into account the divestments and derisking /deleveraging of recent years) and committing to a clearly defined corporate culture. Our goal is to become more agile and efficient and thus more competitive. In doing so, we will not only adapt to changing client behavior but will also meet the legitimate expectations from society as a whole.’ (Johans,2012). KBC group gave its strategy for 2013 and beyond in six points : local responsiveness aimed at building relationships between the bank and customers in rretail,SME and midcap clients,by creating improved banking and insurance, to focus on core banking and insurance products and services, defines its core market;belgium,Czech Republic,Hungary,Slovakia,and Bulgaria, mobilisation of cross border cooperation,implement new organisational structure and committed to the group culture. 2.6 Service Quality on Customer Satisfaction in Agency Banking Ever increasing deregulation, re-regulation, competition and changing technology ,leads to changes in the financial institutions, (Mcleod,1992) this forces institutions to improve on quality of products, Imdadul, (2013) notes that banks are forced to differentiate themselves from time to time in the process to deliver better products and services and he terms this as service quality. Others like Vuk, (2012) in his study on quality indicators, illustrate the existence of structural indicators, process indicators and outcome indicators to give the tripartite scope of quality to constitute quality in totality. Parasuraman et al (1985, 1988), states that service quality can be identified through functional quality dimension: tangibility, reliability, responsiveness, assurance, empathy. which intends to identify gaps in an organization from service expectation till service delivery; the first gap is about the service providers not knowing the expectations of the customers toward the service, the second gap is that the service provider does not know the standard as per the customer and final gap is customers expectation about the service and the perceived service. Vuk, (2012) could have had the same understanding on quality with Haywood-Farmer, (1988) when the latter also mentioned earlier about classes of quality; Physical facilities, Processes, people behavior and Professional judgments compared to Vuk’s structural indicators, process indicators and outcome indicators. Gronroos, (1984) singles out offers technical and functional model in which he illustrates technical quality (outcomes that consumer gets from service organization), functional quality, (how service is provided) and company image(the brand image on the consumers) as prerequisite for an institution’s service quality. Most researchers have used SERVQUAL and Gronroos models in different aspects of business environment. Parasuraman et al, (1985,1988) initially did studies to develop service quality attributes of ten; tangibility, reliability, responsiveness, competency, courtesy, communication, credibility, security, access and understanding the customer ,which was later developed into five areas as mentioned above: tangibility ,reliability, responsiveness, assurance and empathy and based on the this five dimensions SERVQUAL was developed. It has been used to access various organizations on service quality based on the customers’ expectations and perceptions. Johnstone, (1995) criticize this method that it is not meant to work across industries since it is just one single instrument (he found eighteen areas that customers need focus on: access, aesthetics, attentive/helpfulness ,availability, care, cleanliness, comfort, commitment, communication, competence, courtesy, flexibility, friendliness, functionality ,integrity, reliability, responsiveness and security. Cronin and Taylor, (1992) conducted study across industries of banking, pest control, dry cleaning and fast foods and found out the five dimensions was not confirmed. Juran, (1986) upon observing what was going on in the various industries in Japan (manufacturing, service,) such as crisis in quality,inadequacy to deal with it even by the management, led him to develop the trilogy of quality which begins from quality planning that involves the process for preparing to meet goals during operations,then to quality control stage that involves meeting quality at operations in accordance with quality plan. Finally the last stage of quality is quality improvement which ought to result into unprecedented levels of performance. This can be compared vis a vis the finacial sector: KPMG survey, (2013) on products and services most respondents were keen to have their banks improve on product and support in nine out of 14 countries. Seventy percent said that they did not feel assisted to understand their banks products and how to access them while 10% admitted being satisfied with the way teir banks delivered services. 2.7Theoretical Framework This study will adapt the following Theories: Stimulus Organism-Response Theory, Disconfirmation Theory and Innovation Diffusion Theory on Technology Adoption. 2.7.1 Stimulus Organism-Response Theory Mattila, (1999),notes that the way to understand how individual behavior is impacted or affected by the physical environment is the stimulus-organism-response theory, this is the basis of the Pavlov’s dog experiment where he uses an unconditional stimulus of food to trigger an unconditional response of the salivating dog consequently he associates a conditional response of ringing of the bell with food, mostly this can also be seen in the hospitality environment, however it can apply to all ,for example at work (internal customers) it will determine the culture in use which in turn can affect customer service, therefore the physical environment acts like a stimulus, customers are organisms that respond to the stimulus, and behavior directed towards the environment by customers is a direct response to the stimulus. 2.7.2 Disconfirmation Theory Ekinci and Sirakaya, (2004)agrees with the definition of Oliver,(1988) that satisfaction is the guest fulfillment response, it is a judgment that a product or service feature or product or service itself, provided a pleasurable level of consumption-related and levels of under –or over –fulfillment. Mattila, et al, (2003) argues that satisfaction connected to the size and direction of disconfirmation experience occurs as result of comparison between performance and expectations. Thi s theory which was developed by Oliver in 1977 and 1980 seeks to explain the post adoption satisfaction as a function of expectations, perceived performance and disconfirmation believes. 2.7.3. Innovation Diffusion Theory on Technology Adoption Mercer and Pattanayak, (2003) states that adoption can be based on the rate and extent of adoption whereby the rate is premised on percentage of adopters and extent premised on level of use of the new technology. The innovation diffusion theory by Rogers has been employed in studying individuals technology adoption whose main goal is to learn the key elements of adoption(time, communication, and social systems) on individuals’ behavior perceptions regarding advantage, compatibility, social norms, and complexity of the technology. Thulani, Tofara, and Langton, (2009), states in their study, that the evolution of banking technology has been manifested by changes in distribution channels as evidenced by automated teller machines (ATM),phone-banking, Tele-banking, PC-banking ,internet banking, agency banking, (Chang, 2003). Customers adopt new technology in the order of innovators, early adopters, early majority, late majority and lastly the laggards, (Bryce, and Neal, 1943). In Zimbabwe the visible innovation of machines began in 1990 ,when standard chartered bank installed automated teller machines, this is well established in Kenyan banks as a way of reaching customers in different locations of the country –electronic funds transfer, agency banking, ATM, POS, mobile banking, internet banking- it enhances the capability of managers and customers dealing with innovations. Kazi, (2013), states that service in organizations are meant to boost consumer service value and delivery by reducing expenses and that Banks have been receptive on this front for technological development in the financial service. 2.8 Models of Branchless Banking and challenges This study will adapt the following banking models: Bank focused model, Bank led Model and Non-Bank led Theory. 2.8.1. Bank focused model Kapoor,(2010) explains that this model emerges when a traditional bank uses non-traditional low-cost delivery channels so as to provide banking services to its customers. This kind of operations include mobile phone banking, internet banking, to automatic teller machines(ATMs’). This model could offer advantages like, more control, branding visibility to the customer and financial institutions respectively. To counter its challenge of personalization banks offer easy use interface, which is has been made secure with the help of multi-factor authentication.(Kapoor,2010). 2.8.2. Bank led Model This is whereby a bank delivers its banking services through a retail agent, this implies, that the bank develops products and services but distributes them to retail outlets who handle customer interactions. The banks thus become the ultimate provider of financial services and are the institution which holds the customer accounts, (Lyman, Ivatury and staschen, 2006). According to state bank of Pakistan, (2011) this kind of model ;operating in hard to reach areas and dangerous like insecure parts of northern Kenya, lack of expert training, lack of physical security ,poor adoption of the model by clients. 2.8.3 Non-Bank led Theory Kumar, (2004) states that in this neither model customers don’t deal with a bank nor do they maintain a bank account however they deal with non-bank firms either mobile network companies or prepaid card issuers. The customers are exchanging their cash for e-money stored in a virtual e-money account on the non-banks server and is not linked to a bank in the person name, (Kumar et al,2006). Some of the risks it faces are such; as anti-money laundering and counter terrorism financing. 2.8.4 Risks and Challenges in Agency Banking In June 2009, Kenya parliament gave approval for banking legislations to be amended to enable the use of agents, consequently the CBK published guidelines to agency banking in May,2010, (Guideline on Agent Banking-CBK/PG/15, 2010) before this, the banking act didn’t address the areas of banks using agents to deliver financial services. Issues of agency was being handled on a case by case basis by CBK, some of the regulations given by CBK: 2008 regulation that allowed microfinance deposit –taking institutions to use agents; 2009 amendment to the banking Act that allowed banks to appoint agents to perform other activities and a 2009 anti-money laundering/combating the financing of terrorism bill which applied to both bank and non-bank institutions, ( EFInA ,2011).Ayuma, and Mwirigi, ( 2013) in their study higlights challenges involving agent banking as confidentiality ;that every year banks are to sign secrecy forms and maintain confidentiality for all clients yet it is not replicated among the agents;security,most agents are in areas that would be seen as high “risk” areas ,banks should vet security mitigations available for agent;customer service is a big challenge to many agents and banks need to train their agents in customer service so as to replicate their brand image and agents are most likely to be targeted by frauders in the process of identifications. 2.9 Conceptual Framework Moderating variable Dependent variable Intervening variable Independent variables Figure 1: Conceptual Framework Conceptual Framework The above conceptual framework attempts to examine and explain factors that influence customer satisfaction in agency banking and how they are interlinked with each other, some of them include suitability of agency banking, distance to agent location, service value of agent banking, government regulations, institutional culture, product quality, brand loyalty and service responsiveness. According to miles and Huberman, (1994) conceptual framework contains key variables and presumed relationships amongst them. The main objective here is thus to learn the interplay between customer satisfaction and performance of agency banking at KCB Ongata Rongai Branch in terms of agency banking. 2.10 Summary of Chapter Two This chapter has presented literature review on information from other researchers who have done research on similar areas. The chapter presents,introduction,regulatory framework of agency banking, evaluation of agency models in differrent nations theoretical framework models,and conceptual framework . CHAPTER THREE RESEARCH METHODOLOGY 3.1 Introduction This chapter will focus on the methodology to be used to carry out the study; research design, location of study, targeted population, sampling design, data collection tools, pilot testing and data analysis. Saunders et al, (2000) notes that research can have more than one purpose; explanatory (the problem is clearly defined), descriptive (one is aware of the problem), and exploratory (where the problem is ambiguous). This research shall seek new insight into the influence of agency banking on customer satisfaction with banking services especially ,that little is understood as to the view of the customer on the same ,by identifying and describing matters of concern, to the customer. 3.2 Research Design According to Bryman and Bell, (2013) clarifies that a research design is the framework in which the data collection and analysis are anchored , while the methods are the techniques of gathering information. This study shall employ a descriptive research design, A descriptive study is used to describe or define, often by creating a profile of a group of problems, people or events, through the collection of data and tabulation of the frequencies on research variables or their interaction, (Cooper and Schindler, 2003). Descriptive research design was chosen because it will enable the researcher to generalize the findings to a large population. According Glass and Hopkins,(1984) descriptive can either be quantitative or qualitative, meaning it can be used in the collections of quantitative information’s that can be tabulated in a numerical form to show patterns of interaction and in descriptive research to measures of central tendency such as the mean, median, mode, deviance from the mean, variation, percentage and correlation between variables. The descriptive research approach is appropriate due to the fact it allowed analysis and relation of variables. This is going to be cross-sectional study (can involve one-time interactions with groups of people) as opposed to longitudinal study (study that follow individuals over time). 3.3 Target Population The target population is the specific population about which information is desired. According to (Ngechu, 2004), a population is a well defined set of people, services, elements, event, and group of things or households that are being investigated. The population in Ongata Rongai is 195,746 -as per the national census in 2009-,of Kajiado North Constituency Within Kajiado County occupying an area of 148 square kilometres.( Source: Independent Electroral And BoundariesCommission (IEBC,2009). It covers both genders and all professions . Kiranli, and Yildirim,(2013) says it is important to restrict research on the target population ,as illustrated in their study which included teachers working in high schools as applied in faith projects. This study shall make use of sampling out the target population of the KCB Ongata Branch customers of over 50,000 . 3.4 Sample Size A sample is a small proportion of an entire population. The size of sample should be neither excessively large, nor small. It should be optimum. An optimum sample is one which fulfills the requirements of efficiency, representativeness, reliability and flexibility (Kothari, 2004). While Chandran [2004], ‘a sample size is a way of selecting a portion of the population such that the selected portion represents the population adequately. Normally it would be preferable to collect data from over 50,000 respondents who form the population of KCB, Ongata Branch. However due to various constraints sampling would be inevitable. A random sampling technique that ensures representation will be used in selecting respondents. The sample size will be calculated using the formula that gives representative number of respondents as described by Godden(2004). SS= Z 2 x P(1-P ) M2Source: Godden (2004). Where “SS” = sample size for infinite population (more than 50,000), “z” = z value of 1.96 for 95% level of confidence. , “M” = acceptable margin of error for proportion being estimated = 0.05 or 5% and ‘P’= population proportion expressed as decimal assumed to be 0.5(50%) since it would provide the maximum sample size. This produces maximum possible sample size SS= Z 2 x P(1-P ) M2 SS= 1.96 2 x 0.5(1-0.5 ) 0.052 = 384 The following below formula is then used for a finite target population sample size. Source: Godden (2004). Where SS= required sample size for infinite population, Ss = sample size for finite population, pop= is the finite population (known as target population) Ss = 384.00 1+(384-1) 50,000 Ss = 381 3.5 Sampling Procedure Sampling is a process of selecting a number of individuals or objects from a population such that the selected group contains elements representatives of characteristics found in the entire group, (Orodho, 2004). Acharya, Prakash, Saxena, and Nigam, (2013) note that a ‘sample’ is a subset of the population, selected so as to be representative of the larger population. Since we cannot study the entire population we need to take a sample. Sampling techniques are broadly classified into ‘Probability’ and ‘Non-probability’ samples. Probability sampling allows the investigator to generalise the findings of the sample to the target population. Probability sampling includes Simple random sampling, Systematic random sampling, Stratified random sampling, Cluster sampling, etc (Acharya, Prakash, Saxena , and Nigam, 2013). While non-probability sampling where the researcher decides to include or exclude some elements or sample units. A sampling frame is a list, directory or index of cases from which a sample may be selected , (Mugenda and Mugenda, 2003). A sampling frame is crucial in probability sampling, because if the sampling frame is not drawn appropriately from the population of interest, random sampling from that frame cannot address the research problem and to ensure representation, a sampling frame is important. A sampling frame is a list, directory or index of cases from which a sample may be selected , (Mugenda and Mugenda, 2003). Generalisations can be made ‘only’ to the actual population defined by the sampling frame. Non-probability sampling includes Convenience/purposive sampling, Quota sampling, Snow ball sampling, etc. Each method of sampling has its own advantages and limitations, however, probability sampling is preferable, since its results can be generalised. For the purpose of this study the sampling frame will be a list of all areas both rural and urban areas with registered KCB agents that operate under Ongata Branch. 3.6 Data Collection Tools and Techniques Ericksson and Wiedersheim, (1997) state that there are two sources of data: primary sources and secondary sources. The selection of an appropriate method of data collection depends on the research problem, design and categories of data requirements. The study shall use primary and secondary data. Secondary data refers to information that is already available for use by the author for a different use other than the researcher’s current inquiries. Secondary data is being used in this research to create a basic knowledge on the problem which is under investigation; the sources shall include bank reports, academic literature and text books, they are being subjected to triangulation so as to maintain high quality and reliability, (Bryman and Bell,2013). Primary sources that are been used in this research, are publications in which researchers have reported the results of their studies, mostly in the form of journals which are published monthly, quarterly, or annually. The primary data in this research shall be consists of observations, administering questionnaires to collect information. 3.6.1 Questionnaires The questionnaires will be filled by clients who visit the KCB Ongata Branch banking hall and those served at the agents’ site. The ones filled at the banking hall will help capture information of those who do not use the agency banking and also the extent of usage. The questionnaire will contains open ended and closed questions and is divided into various parts which will gather general and demographic information. The researcher will administer questionnaires to 381 respondents for a period of one month. The use of questionnaires is important as they are easy to administer, gives the respondents sufficient time to arrive at a well thought response and are free from the researchers’ bias. 3.6.2 Reports from the Bank The researcher will collect reports from the bank regarding the total number of customers served by KCB, Ongata Branch. This will facilitate in determination of the sample size of the research. The researcher will also use the bank reports on the location of agency to ensure representation during sampling. A letter of introduction will be attached to the questionnaires explaining the purpose of the study. 3.7 Pilot Testing, Reliability and Validity of The Research Instrument It is important to evaluate the concepts of pilot testing, validity and reliability in an investigation so as to enhance its quality(research quality).The accuracy of data collected shall largely depend on the data collection instruments in terms of validity and reliability, (Mugenda and Mugenda 2003). 3.7.1 Pilot Testingof The Research Instrument According to Bryan and Bell, (2013) pilot testing or pre-test is very crucial for it grants the researcher an over view of the survey and that it goes through a process of verification to establish its quality before exposing it to the public. In that response a group of three or five (of different, ages and occupations) shall be sought to help in order to understand how the questionnaire shall perceived or if there is any misunderstanding. The individuals shall fill the questionnaire and shall be timed in order to know how long it shall take to fill the questionnaire, after which they shall be engaged to discuss questions that are not clear and adjustments to be made. Expert opinion is to be used as well as having objective questions included in the questionnaire as emphasized by Cooper and Schindler, (2003). The pre-testing will assist to enhance clarity of the questionnaire. 3.7.2 Validity of the Data Instrument Validity is the degree to which results obtained from the analysis of data actually represents the phenomenon under study, as noted by Robinson, (2002 ).According to Patron, (2001) validity is quality attributed to proposition or measures of the degree to which they conform to establish knowledge or truth. It refers to the extent in which an instrument asks the right Questions in terms of accuracy. Mugenda and Mugenda, (1999) define validity as the accuracy and meaningfulness of inferences which are based on research results. The content validity of the instrument will be determined through piloting, expert opinion and logic methods, where the responses of the subject will be checked against the research objectives in order to get rid of any ambiguity. 3.7.3 Reliability of the Data Instrument Reliability refers to a measure of the degree to which research instruments yield consistent results, (Mugenda and Mugenda 2003). In this study reliability is to be ensured by pre-testing the questionnaire with a selected sample. Test re-test estimates the reliability obtained by correlating data collected with those from the same questionnaire collected under as near equivalent conditions as possible by administering the questionnaire twice to the respondent. This will measure consistency of responses across all questions or a group of questions. Internal consistency involves correlating the responses to each question in the questionnaire with those in the other questions in the questionnaires. 3.8 Data Analysis Techniques Data analysis shall aim at fulfilling the research objectives and to provide answers to research questions. The choice of analysis procedure is pegged on how well the technique shall meet the objectives of the study to the scale of measurement of variables in question. Data collected shall be analyzed using descriptive statistics. The descriptive statistical tools such as frequencies, percentages, mean and standard deviation shall help the researcher to describe the data in terms of the variability of responses.it shall also involve editing, tabulation and coding of data, the purpose of editing is to correct and inspect each questionnaire to ensure completeness, comphrensiveness and consistency of data collected. In addition advanced statistical techniques (inferential statistics), will be used. Regression analysis shall be used to determine the relationship between the independent and dependent variables. SPSS (statistical package for social sciences) or excel package is to analyze the data since it allows data sets to loaded more easily making it user friendly. The researcher is to use content analysis to analyze qualitative data. 3.9 Ethical Considerations Ethics in this research refers, to the rules and regulations that shall guide the conduct of this research work. It is an important part in the planning and implementation process of this project. According to Sieber, (1992) in her study of Planning Ethically Responsible Research, the following principles are mentioned which consequently shall guide this research work; 1) Informed Consent; the participants shall decide whether to be involved or not to be, in the research project . 2) beneficence; shall be employed with the aim of maximizing good outcome in relation to the participants and avoiding unnecessary harm, risk or wrong. 3) Respect; this study seeks to respect the autonomy of persons or individuals including the infants, children, and disable persons. 4) Justice; shall tend to ensure reasonable, non-exploitative procedures and there fair administration in regard to costs, benefits among groups and stakeholders. 5). Privacy; the research shall ensure the control over access to an individual and associated information against giving unwanted information.6) Confidentiality; the study shall make agreement with participants on what shall be done or not done with their data. 7) Anonymity; it shall make use where applicable; the lack of identifiers, meaning information that will indicate which person or institution provided what data. 8) The use of the data and report shall be relayed to those it is intended on basing on integrity, and quality of research work. It shall try at all cost not to involve the use of deception, however in case of its use, then, debriefing or dehoaxing shall be used. 3.10 Operationalization of Variables Objectives/Research Questions Type of variable Indicators Measurement scale Method of data collection Instrument/Data collection tools Data Analysis Technique To what extent does convenience of agency bankinghas on customer satisfaction? independent Transactional time. Distance to agent. Ratio Nominal Nominal Administering questionnaires Questionnaire Interview guide Frequencies and percentages Inductive analysis How does service value affect customersatisfaction? independent Customer service. Sense of belonging. Nominal Ratio Administering questionnaires Questionnaire Interview guide Frequencies and percentages Inductive analysis How does service responsiveness contribute to customer satisfaction? independent Turnaround time. System efficiency. Customer complains responses. Nominal Ratio Administering questionnaires Questionnaire Interview guide Frequencies and percentages Inductive analysis To what extent does service quality influence customer satisfaction? independent Product reliability. Product usability. Product perception. Nominal Ratio Administering questionnaires Questionnaire Interview guide Frequencies and percentages Inductive analysis REFERENCES Acharya, A. S. Prakash, A. Saxena, P. & Nigam, A. (2013). Sampling: Why and How of It?. Indian Journal of Medical Specialities, 4(2), 330-333. Doi:10.7713/Ijms- Ayuma D., Mwirigi M.F.,( 2013) The Role Of Agency Banking In Enhancing Financial Sector Deepening In Emerging Markets: Lessons From The Kenyan Experience European Journal of Business And Management www.iiste.orgISSN- (Paper) ISSN- (Online) Vol.5, No.21 Anderson, Eugene W., & Sullivan, Mary W. (1993). “The Antecedents and Consequences Of Customer Satisfaction For Firms,” Marketing Science, Spring, P. 129 Anderson (1973), “Consumer Dissatisfaction: The Effect Of Disconfirmed Expectancy On Perceived Product Performance”.Journal of Marketing Research: Vol.10 (2), Pp.38-44 Bitner, M (1987). “Contextual Cues And Consumer Satisfaction: The Role Of Physical Surroundings And Employee Behaviours In Service Settings. Unpublished Doctoral Dissertation,University of Washington. Bryman, A. and Bell, E. (2013). Företagsekonomiska forskningsmetoder. 2nd edition. Stockholm : Liber AB. Translation : Business Research Methods Chang, R. (2009). Consumer Control Brings Brand Loyalty. Advertising Age, 80(11), 26. Campbell CS Maglio PP ,Davis M, (2011) "From Self-Service To Super-Service: How To Shift The Boundary Between Customer And Provider",Information Systems &E- Business Management,Vol. 9, No.2, , Pp.173-191 Christoper, W. (2002), Interfirm Relationships And Informal Credits In Vietnam, The Quarterly Journal of Economics Vol.114 No.4, P 153-170. Chahal, H., & Kumari, N. (2011). Consumer Perceived Value And Consumer Loyalty In The Healthcare Sector. Journal Of Relationship Marketing ,10, 88–112 CGAP (2011c).Delivering Government Payments In The Wilds Of Northern Kenya:http://technology.cgap.org/2011/05/04/delivering-government-payments-in-The Wilds-of-Northern-Kenya Cooper D. and Schindler, P. S (2003).Business Research Methods,(8th Ed). New Delhi: Tata Mcgraw-Hill Publishing Company. India. Convenience Trumps All Factors For Bank Customer Loyalty. (2014). Teller Vision, (1437), 2-3. Cronin, J.J And Taylor, S.A,(1992), Measuring Service Quality: A Rexamination And Extension, Journal Of Marketing, Vol 56,Pp.55-68 Cheng, Chun Hung, Madan ,Manu S. Motwani,Jaideep, (1996),Total Quality Management: Implementing Quality Management In The Banking Services Sector, Vol. 7,Issue 4 Central Bank of Kenya,2010 Central Bank of Kenya,2013 Dias, Denise, And Katharine Mckee. (2010). “Protecting Branchless Banking Consumers: Policy Objectives And Regulatory.” Focus Note 64. Washington, D.C.: CGAP. Dupas, Pascaline and Jonathan Robinson (2009). “Savings Constraints and Microenterprise Dubey, S. (2011). Service Quality Perceptions: A Case Study of Banking Services. International Transactions In Applied Sciences, 3(2), 221-236. Eriksson L. T., & Wiedersheim-Paul F. (1997)Att Utreda, Forska Och Rapportera (5th Ed). Stockholm. Liber Ekonomi. Efina Access,(2011) Evaluation of Agent Banking Models In Different Countries, .Foxford Policy Management Ltd. Ekinci Y. &Sirakaya E. (2004). ‘An Examination Of The Antecedents And Consequences of Customer Satisfaction’. In: Crouch G.I., Perdue R.R., Timmermans H.J.P., &Uysal M. Consumer Psychology of Tourism, Hospitality And Leisure. Cambridge, MA: CABI Publishing, pp. 189-202. Eggert, A., Ulaga, W. (2002), „Customer Perceived Value: A Substitute For Satisfaction In Business Markets?” Journal Of Business & Industrial Marketing, Vol. 17, No. 2/3, Pp. 107-118 Eklof [Sup1], J. A., Hackl [Sup2], P., &Westlund [Sup1, 2. (1999). On Measuring Interactions Between Customer Satisfaction And Financial Results. Total Quality Management, 10(4/5), S514.Http://www.theacsi.org/about-acsi/the-science-of-customer-satisfaction Festinger, L. (1957). A Theory of Cognitive Dissonance. Stanford, CA: Stanford University Press. Fiserve/M-Com , 2009 Financial Services Survey-Nigeria. 2010 Financial Bill-Kenya.,2009 Godden, W. (2004). Sample Size Formulas. Retrieved from http://williamgodden.com/samplesizeformula.pdf Gandhi, M. &Agrawal, P. (2013). Sustaining Customer Satisfaction & Loyalty In Indian Banking. Indian Streams Research Journal, 3(3), 1-18. Glass, G.V. & Hopkins, K.D.(1984). Statistical Methods In Education and Psychology. Englewood Cliffs, NJ: Prentice Hall. Guideline on Agent Banking-CBK/PG/15, 2010. Gardner M.J, Mills D.L & Cooperman E.S (2000), “Managing Financial Institutions Anassets Liability Approach’’, (4th Ed.) Malasya, Asia. John Wiley & Sons. Hovland, C., O. Harvey & M. Sherif (1957). “Assimilation And Contrast Effects In Reaction To Communication And Attitude Change. Journal of Abnormal and Social Psychology, 55(7), 244- 252. Haywood-Farmer, J. (1988). A Conceptual Model Of Service Quality. International Journal of Operations & Production Management, 8(6), 19-29. Imdadul Haque, M. (2013). Assessing The Adequacy Of SERVQUAL Dimensions In Retail Banking. International Journal of Academic Research, 5(4), 99-104. Doi:10.7813/2075- -/5-4/B.14 Independent Electoral and Boundaries Commission, 2009. Johnston,R.(1995),” The Determinants Of Service Quality:Satisfiers And Dissatisfiers”,International Journal Of Service Industry Management, Vol.6 No.5 Pp.53-71 Johnson, G. And Scholes K.,(2003). Exploring Corporate Strategy 6th Edition, New Jersey: Prentice Hall. Kiranli, S., &Yildirim, Y. (2013). Technology Usage Competencies of Teachers: Prior to Faith Project Implementation. Electronic Journal of Social Sciences, 12(47), 88-105. Kothari, C. [1998]. Research Methodology, [2nd Ed.] New Delhi;Willey Eastern Ltd. Kothari, Cr., (2004) Research Methodology Methods And Techniques, New Age International (P) Ltd., New Delhi. KPMG.,2013 Katua, K. Johnson.,(2012).Green Supply Chain Strategy And Sustainable Competitive Advantage Of Large Manufacturing Firms In Kenya. Nairobi University Khristianto W. Kertahadi, and Suyadi I. (2012). The Influence of Information, System, Service On Customer Satisfaction And Loyalty In Online Shopping Of Forum Jual BeliKaskus.US, Malang Region. International Journal of Academic Research, 4(2), Kazi, A. (2013). An Empirical Study of Factors Influencing Adoption of Internet Banking Among Students of Higher Education: Evidence from Pakistan. Journal of Internet Banking & Commerce, 18(2), 1-13. Kasekende A. L. (2008), Africa Continues Steady Growth, Presentation Paper At The Africa Forum, 2008. Kapoor, S. (2010). Succeeding In UK With The Bank-Focused Model Of Mobile Banking. Finacle Whiteboard. Kyalo.,J(2012) Factors affecting customer’s willingness to Adopt Mobile Phone Banking at National Bank, Unpublished M.A Thesis, Nairobi University. Kirimi, M.(2011) Extend of Implementation of Agency Banking Unpublished, M.A Thesis, Nairobi University. Kumar, A., Nair, A., Parsons, A., And Urdapilleta, E. (2006). Expanding Bank Outreach Through Retail Partnerships: Correspondent Banking In Brazil. World Bank Working Paper No. 85. Kumar, A., Nair, A., Parsons, A., And Urdapilleta, E. (2006). Expanding Bank Outreach Through Retail Partnerships: Correspondent Banking In Brazil. World Bank Working Paper No. 85 Mattura P. (1982 ) La Gestione Del Marketing Nella Banca,In Baravelli, M., Biffis, P. And Mottura,P. ,Struttura Organizzativa, Controllo Di Gestione E Marketing Nella Banca”,Giuffrè, Milano. Mcleod, W. (1992) Solving The People Puzzle, Texas Banking, 81, Pp. 1, 14. Monk, J. & Landis, K. (1987) International Electronic Balance Reporting Is Worth Fighting For, Cash Flow, 8, Pp. 58, 60. Mugenda&Mugenda (2003) Research Methods: Acts Press, Nairobi. Maznah Wan, O., &Mohd Noor Mohd, A. (2010). Brand Loyalty and Relationship Marketing In Islamic Banking System. Canadian Social Science, 6(1), 25-32. Mattila A. (1999). ‘Consumers’ Value Judgments’, The Cornell Hotel And Restaurant Quarterly, 40 (1) Pp. 40-46, Sage Publications.P.42. Moliner-Veĺazquez, B., Gil-Saura, I., & Ruiz-Molina, M. E. (2011). Conceptualizing And Measuring Loyalty: Towards A Conceptual Model Of Tourist Loyalty Antecedents.Journal Of Vacation Marketing,17(1), 65–81. Mercer, E.And Pattanayak, S.K. (2003). Agroforestry Adoption By Smallholders. In Forests In A Market Economy.Dordrecht Kluwer Academic Publishers. Forestry Sciences Series, 72: 283- 299. Mintzberg, H. and Quinn J.B. (1993).The Strategy Process-Concepts, Contexts and Cases. Prentice HallInc, Engelwood Cliffs N.J Mugenda, O.M., &Mugenda, A.G. (2003).Research Methods: Quantative and Qualitative Approaches, Nairobi. Acts Press. Orodho, J.M. [2004] .Techniques of Writing Research Proposals and Report.Nairobi: Masola Publishers. Ounza J.R. (2009). Impact of The Use Of Information And Communication Technology On The Level of Student Satisfaction With Service Delivery; The Case Of Nairobi University.Unpublished M.A Thesis, Nairobi University Oliver, R. L. (1997).Satisfaction: A Behavioral Perspective On The Consumer.Newyork, NY: Mcgraw- Hill Oliver, R. L. (1980). A Cognitive Model Of The Antecedents And Consequences Of Satisfaction Decisions.Journal Of Marketing Research, 17, 460-469 Http://dx.doi.org/10.2307/- Podpiera, J. (2008), Emerging Banking Market Experience, Journal Of Financial Stability Working Paper No. 6,Czech National Bank. Peyton, R.M., Pitts, S., and Kamery, H.R. (2003). “Consumer Satisfaction/Dissatisfaction (CS/D): A Review of The Literature Prior To The 1990s”, Proceedings Of The Academy of Organizational Culture, Communication And Conflict. Vol. 7(2), P.42. Parasuraman, Valerie, A. Zeithaml, And Leonard L. Berry, (1985). “A Conceptual Model of Service Quality and Its Implications For Future Research” Journal Of Marketing, p. 44. Parasuraman,Zeithamal And Berry, Service Marketing: New Delh:Pearson Education Publication Pvt. Ltd, Pp-93-96 Peng, W. Mike, (2008). Global Strategic Management Ravald, A., Grönroos, C. (1996), “The Value Concept And Relationship Marketing”, European Journal of Marketing, Vol. 30, No.2, Pp.19-30. Rifkin, J. M. (1994). Consumers Embrace Concept Of Convenience. Hispanic Times Magazine, 15(4), 18. State Bank Of Pakistan (2011). Branchless Banking Regulations: For Financial Institutions Desirous To Undertake Branchless Banking. Banking Policy & Regulations Department. Shoemaker, S., & Lewis, R. C. (1999). Customer Loyalty: The Future Of Hospitality Marketing.International Journal Of Hospitality Management,18, 345–370. Sieber, Joan E, (1992). Planning Ethically Responsible Research: A Guide for Students and Internal Review Boards. Applied Social Research Methods Series, vol. 31. Newbury Park, CA: Sage Publications. SBS & CGAP (2010) Financial Inclusion and Consumer Protection In Peru: The Branchless Banking Business. Saunders, M., Lewis, P. Thornhill, A. (2000) Research Methods For Business Students (2nd Ed.) , Essex: Pearson Educations. Saunders, M., Thornhill, A. (2003) Research Organizational Justice, Trust and The Management of Change an Exploration, Personnel Reviews Vol. 32, No.3, Pp. 360-375 Thulani, D., Tofara, C.,& Langton, R. (2009). Adoption and Use of Internet Banking In Zimbabwe: An Exploratory Study, Journal Of Internet Banking & Commerce, 14(1) Thomas Salzberger& Monika Koller “Cognitive Dissonance – Reconsidering An Important and Well Established Phenomenon In Consumer Research”. 120. Teery G. Vavra (1997). Improving Your Measurement Of Customer Satisfaction: A Guide To Creating, Conducting, Analyzing, and Reporting Customer Satisfaction Measurement Programs.American Society for Quality.Pg.47. Vuk, T. T. (2012). Quality Indicators: A Tool For Quality Monitoring And Improvement. ISBT Science Series, 7(1), 24-28. Doi:10.1111/J-.X Wolfson, A., Tavor, D., & Mark, S. (2012). Sustainability And Shifting From A 'Person To Person' To A Super- or Self-Service.International Journal of U- & E-Service, Science & Technology, 5(1), 25-34. Westlund, A. &Fornell, C. (1993) Customer Satisfaction Measurements and Its Relationship To Productivity Analysis, Proceedings of The 8th World Productivity Congress, Stockholm. Wanjugu., J.,(2012),Factors influencing Access to Agency Banking, Unpublished M.A Thesis, Nairobi University . Appendix I: Questionnaire Dear participant, I am a student at University of Nairobi pursuing Masters Degree in Project Planning and Management majoring in Project Management. I am carrying an analysis on, customer satisfaction in agent banking - A case study of Kenya Commercial Bank Ongata Rongai Branch. Instructions Please take a few minutes to fill out this questionnaire honestly and to the best of your knowledge. The information given will be confidential and will be used for academic purposes only Place a tick in each box that applies to you. Some questions ask for a written response. Take all the space necessary to complete the question. You may use the back of the form if necessary Section A: General information (all respondents) 1. Please state your gender Male [] Female [] 2. Please state your age. 18-25[] 25- 35[] 35- 40[] 40- 50[] Over 50[ ] 3. Marital status. Married[] Single[] Widowed[] Any other. Kindly state………………………………………………………………. 4. What is your highest level of education? Degree [] Diploma[] Certificate[] Secondary [] Primary [ ] Any other. Kindly state……………………………………………………………….. 5. Have you ever used KCB agency banking? Yes [ ]No [ ] 6. For how long have you been a client of Kenya Commercial Bank? 1 – 6 months[] 6 – 12months[] 12 – 18 months[] 18 – 24 months[] 24 – 30 months [] 30 – 36 months [] Any other. Kindly state ……………………………………………………………… 7. What is your occupation? Farming [] Business [] Employed [] Casual labour[] None [] 8. What is your monthly basic salary range? Below Ksh. 5000.00[] Ksh. 5000 -[] Ksh 10000 -[] Ksh15000 -[] Over Ksh-[] 9. What are your approximate expenses for the month? Below Ksh. 5000.00[] Ksh. 5000 -[] Ksh 10000 -[] Ksh 15000 - [] Over Ksh-[] 10. How far is your home from the Kenya Commercial Bank Agent? Less than ¼ km[] Less than 1/2km[] Between 1/2km – 1km[] Between 1-2km[] Over 2km[] SECTION B (those who use Kenya Commercial Bank Agents System) 11. How did you learn about Agent Banking? Media [] Through a friend[] From an agent[] Road show[] from the bank[] 12. Have you ever attended any meeting or awareness campaign organized by Kenya Commercial Bank on agency banking? Yes[]No[] 13. Do you think that you were adequately prepared to use agency banking? Circle the scale that best represents your position 1. Strongly agree2. Agree3. Neutral 4. Disagree5. Strongly disagree 14. How often do you use the KCB agency banking? Daily[] Weekly[] Monthly[] Once in a while [] 15. How do you rate agency services in dealing with you? Excellent goodsatisfactory poor Responsiveness(system effect) Security Professionalism Government rules Technical Support Product Quality(its usability) Service Value(belongingness) Competitiveness: Quality Technology Use Confidentiality Suitability Convenience (distance ) Agent Friendliness Transactional Fee Overall 16. Rate the following statement that best represents your perception based on the below criteria in the table. 17. To what extent do you use these services At Kenya Commercial Bank Agency? Services provided at Equity agent Not at all Little extent Moderate extent Great extent Very great extent Cash deposit Cash Withdrawal Transfer of funds Cheque book request Loan repayment Balance enquiry Any other 18. What are the challenges you are facing in using KCB agency banking? …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………. 19. In your own opinion, what are the most important issues to be addressed to improve customer satisfaction of KCB agency banking? ……………………………………………………………………………………………………………………………………………………………………………………………… 20. If you have any other comments on KCB agency banking that you would like to give or How likely would you recommend KCB agency to another? Please use the space below. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… Thank you for taking time to complete this question Appendix II: Work Plan Project Task Duration -approximation Start Date End Date Project Planning / Setup/planning 4weeks 09/20/13 10/26/13 Proposal writing 8 weeks 10/26/13 12/26/13 Questionnaire design 1week 12/26/13 12/31/13 Project proposal defense preparation 3days 3/20/14 3/23/14 Data sample 2month 3/26/14 4/26/14 Data collection 2month 3/26/14 4/26/14 Data preparation 2weeks 5/26/14 6/29/14 Data tabulation 2days 6/26/14 6/28/14 findings 2days 5/27/14 5/29/14 Field Testing 2days 4/29/14 4/30/14 Final draft writing and defence 1 week 6/12/14 6/29/14 Appendix III: Budget Activity Item Quantity Unit Price per unit (kshs) Total cost (kshs) Proposal writing Printing 5 Copies 400 2,000 Laptop 1 piece 45,000 45,000 2 flash drives 2 pieces 1500 3000 Sub total 50,000/= Data collection Enumerators 4 10 days 1500 6,000 Questionnaire photocopying (338*8)=2704 pages 3 8,112 pencils 10 pieces 25 250 Field note books 5 pieces 100 500 Sub total 14,862/= Project writing Internet access 200 hours 60 12,000 printing 10 copies 200 2,000 Sub total 14,000/= Emergencies 20% of total 15,772.4/= Grand total 94,634.40/= Sources of funds; own and family