Customer choice of retail banking in selected rural communities in Agona West Municipality of the Central Region of Ghana

Abstract

Some researchers have investigated why customers choose different retail banks. These studies have focused on urban communities, with limited evidence from rural communities. This study, therefore, sought to examine customers’ preference for banks in a rural setting. Data for the study was collected, using cluster and proportional sampling methods from three rural communities in the Agona West Municipality in the Central Region of Ghana. In all, 315 retail customers of three commercial banks, one development bank and a rural bank were sampled. A Chi square test was used to analyze the data collected. Factors that influence customer choice of retail banks include interest charges, service delivery, customer relationship, number of bank branches, proximity and convenience to customers. The results also revealed a strong relationship between occupation type and choice of bank. Age and sex of customers, however, did not influence customer preference for banks. The paper offers policy recommendations that will enable banks to attract more customers in the rural communities to enhance the financial inclusion agenda. Banks need to educate their customers about what go into interest rates and are also encouraged to create market niches for people in rural areas.