Service Quality and Customer Satisfaction in Agency Banking: A Mixed-Methods Study from Kafue District, Zambia

Wesley Chimwemwe Simukoko; Daphne Munsaka Phiri

doi:10.59413/ajocs/v7.i2.49

Authors

Wesley Chimwemwe Simukoko Graduate School of Business , University of Zambia Author
Dr. Daphne Munsaka Phiri University of Zambia Author

DOI:

https://doi.org/10.59413/ajocs/v7.i2.49

Keywords:

Service quality, Customer satisfaction, Agency banking, SERVQUAL, Financial Inclusion, Kafue District, Zambia, mixed-methods

Abstract

Agency banking has emerged as a critical strategy for enhancing financial inclusion in Zambia, particularly in peri-urban areas where traditional bank branches are limited. However, the success of this model depends fundamentally on service quality delivered at agent points. This study investigated the effect of service quality on customer satisfaction within the agency banking model in Kafue District, Zambia. Grounded in the SERVQUAL model, the research employed a mixed-methods sequential explanatory design. A structured questionnaire based on the five SERVQUAL dimensions (Tangibles, Reliability, Responsiveness, Assurance, and Empathy) was administered to 400 agency banking customers across three banks (Zanaco, FNB, and Indo Zambia Bank), achieving a 93% response rate (n=372). This quantitative phase was followed by in-depth interviews with 15 key informants (10 agents, 5 branch managers) and field observations. Quantitative data were analysed using descriptive statistics and multiple regression, while qualitative data were analysed thematically. Findings revealed that Assurance (Mean=3.67) and Empathy (Mean=3.62) emerged as relative strengths, indicating customers perceive agents as trustworthy and caring. However, Reliability (Mean=3.30) and Responsiveness (Mean=3.34) were identified as critical weaknesses, with particular concerns about system reliability (Mean=2.88) and waiting times (Mean=2.95). Overall customer satisfaction was moderate (Mean=3.58). Regression analysis showed the five dimensions collectively explained 55.2% of variance in satisfaction (R²=0.552, p<.001), with Assurance (β=0.266), Empathy (β=0.216), and Reliability (β=0.204) as the strongest predictors. Qualitative findings confirmed that system failures and cash shortages are primary operational challenges, while agent interpersonal skills partially compensate for technical shortcomings. The study concludes that improving customer satisfaction requires prioritising technological redundancy, agent training, and cash liquidity management over cosmetic improvements. These findings have implications for banks, policymakers, and future research on agency banking in developing economies.

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