Banking and other financial institutions in Ghana play a critical role in building the economy through the provision of capital in diverse forms. Banks facilitate the accumulation and allocation of capital by funnelling savings into loans to governments, businesses and individuals. In Ghana, the important role of the banking sector in capital mobilization, allocation and distribution cannot be disputed. The recent worldwide credit crunch which carried some notable banks into oblivion has affected the performance of many banks globally. Thus, to survive in the long run, institutions have realized the need to adopt sound strategies to compete in better ways while being cautious.

Just like the economy in general, banking has an interesting history: moving from tightly controlled the post-independent era, through various phases of relaxation, to the present where it is purely market-driven. With the passage of the universal banking law, all types of banking can be conducted under a single corporate banking entity and this has greatly reorganised the competitive scopes of the several banking products in Ghana (Hinson and Hammond, 2006).

The constraints experienced earlier in the development of banking in Ghana has, no doubt, left wounds that would take some time to heal. For instance, only a small percentage of the population deals regularly with the bank. A considerable number of individuals still prefer to use unconventional means for financial dealings as opposed to using the banks. This has created a keen competition in the industry.

Thus, for firms to survive in this contemporary high competitive business environment, they should be able to attract and retain customers. Customer service has, therefore, being brought to the centre of banking activities. This has generated an unprecedented desire by both banks and non-banks financial institutions for all types of information on consumer behaviour and motivation pertinent to banking activities. As indicated by Brent (1995) and Holmlund and Kock (1996), the drive to acquire information about customers is reflected in the growth of relationship banking that draws heavily on the experiences of relationship marketing.


Traditionally, businesses employ aggressive marketing strategies to attract new customers and increase market share at the expense of competitors. Research shows that satisfied customers serve as good marketing outlets by recommending the service to friends and families thereby increasing market share and profitability of the firm.

In the banking industry of Ghana high customer attraction is hypothesised to be linked to high firm performance. Bankers consider customer attraction and loyalty as important to market share maintenance and profitability. Because of the high customer defection, the debate as to what informs customer choice is still rife.

Usually, the marketing plans of organizations do fail at implementation due to improper identification of the factors or determinants that consumers consider in selecting who to deal with (Khazeh and Decker, 1992). And as clearly expressed by Ghauri and Grönhaug

(2005),                     we   should   not   accept   or   reject   as these assumptions critically and unless we find logical and reliable explanations to accept

or         reject   them‟.

Thus, though several studies investigate the issue of factors affecting selection of retail

banks; very few have attempted to directly link the factors of preference to specific banks

(Maiyaki, 2011). Hence, there is need for banks, like other service organizations, to

effectively identify the important parameters that attract   customers‟helpin   att

their choice of banks to do business with. In addition, there is the need for banks to know

how customers choose their banks and take measures to attract them before others do.

Therefore, this study will investigate the factors that influence people in their choice of a

bank in Ghana, with specific reference to the Makola Market. It would identify the

factors that  determine customers‟choice of banks to serve as a basis  for designing

marketing strategies that would help to attract more customers and increase profitability.


The main objectives of this research are

  1. Investigate the banking practices of the Makola Community.
  1. Identify the factors influencing banking choices of consumers.

The specific objectives of this research are as follows:

  1. Identify key factors that influence banking choice of customers at Makola.
  2. Establish the relative importance of these factors in choosing a bank by customers.
  1. Identify the most popular bank in the Makola community.
  1. Identify the preferred bank to do business with in Makola.

This research shall provide empirical evidence on the factors that are considered important to customers when they are choosing a bank. The study will provide insight into what the customer sees as influential in such decisions. Also, factors that are not seen as very useful in the choice considerations of banks by customers would be identified.

  1. What are the main factors that inform   a   customer‟ the   c Makola community?
  1. What is the relative importance of these factors?
  1. Which bank(s) are considered most popular?
  1. What are the preferred banks in the Makola market?

The scope of this study is limited to what factors customers consider when choosing a bank to open an account in the Makola area. The issue of concern is the identification of the key factors customers look out for when making such decisions. It will not consider factors that cause(s) customers to leave any particular bank. This perspective was taken in order to maintain the focus on customer choice factors rather than quit factors. Additionally, this study would look at bank preference in the Makola area. Although the study is essentially a broad stroke analysis covering multiple factors of the banking

industry, it does not investigate all possible aspects. Furthermore, its primary focus is on

the interaction of those levels, rather than on each level individually. Also, the study does

not include a review of banking policy or the political economy of banks in the country.

Neither does it investigate administrative nor management practices within the sector.

Organizational and general bank profiles are also beyond the scope of this study.


This thesis is presented in five chapters (Figure 1.1 below). The outline is such that

Chapter One introduces the study with a general discussion and background information

on banking in Ghana; a description of the research problem, study objectives, relevance

and scope. Chapter Two presents the literature review of the study. It expands on the

theoretical background of the study and also reviews the literature on related studies.

Chapter Three describes the research methodology recommendations.

The focus of the fourth chapter is on the empirical results obtained and the discussions of these results. The final chapter (Chapter 5) provides concluding discussions and recommendations. Further, a summary of the main thesis of the study is presented, the general implications of the study given and also the study limitations and recommendations for management and for further academic research provided in the final chapter.

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