Quality of Service and Customer Satisfaction of BHBFC: An Empirical Study on Bangladesh House Building Finance Corporation (BHBFC) Based

on Rajshahi Branch

Abstract
The main objectives of the study are to evaluate the customer satisfaction of the service quality and to assess whether services provided by the institution is satisfactory to Bangladeshi customers especially in term of service categories like credit granting, loan recovery, terms of loan. The study also examines empirically the determinants of service quality in Bangladesh. A questionnaire for such purpose is designed and different statistical methods will be applied to analyses the collected data. Key Word: Service quality, Customer satisfaction, Housing industry.

Introduction
Bangladesh House Building Finance Corporation (BHBFC) is one of the leading loan providers in housing sector of Bangladesh. House Building Finance Corporation was established in 1952 to provide financial assistance in housing sector. After independence, the corporation was reconstituted as Bangladesh House Building Finance Corporation (BHBFC) by the Presidents Order no 7 of 1973. Shelter is one of the five basic needs of human being to alleviate the acute housing problem. The primary objective is to alleviate the acute housing problem in the country. It is the only financial institution in the housing sector that has been financing for the last 6 decades. Although some of the commercial banks and private sector housing institutions are providing financial assistance to this sector, yet, BHBFC continues to be the major source of housing credit for the middle and lower middle income group of people till today. BBHFC is the only state-owned specialized financial institution of its kind. The total paid-up capital of the corporation is paid by the Government of Bangladesh.

Literature Review:
Satisfaction, which appears to be a central concept in marketing literature (Erevelles and Leavitt 1992), has been well researched in the context of consumer services (Curran et al. 2003, Ganesh et al. 2000). Services marketing literature, comprising empirical studies mostly undertaken in the advanced Western nations, tends to view service quality as a major construct in explaining customer satisfaction (Omachonu et al. 2008, Jamal and Naser 2002, Ueltschy et al. 2007, Lee et al. 2000, Voss et al. 2004). The confirmation/ disconfirmation theory (Churchill and Surprenant 1982, Oliver 1980) views satisfaction as a function of the confirmation of expectations. In the context of the current research, it implies that fulfillment of the customers expectations regarding the quality of services and level of customer involvement with the institution can

produce the desired level of customer satisfaction. In real life situations, customers tend to examine their relationships with the service provider on the basis of the extent of their involvement with that firm and then evaluate their satisfaction accordingly (Goodman et al. 1995). Service quality, which has been viewed as an antecedent for different relational constructs such as trust, commitment or loyalty (Caceres and Paparoidamis 2005), also plays an antecedent role for developing customer involvement defined as an individuals stimulation for participating in a goal related object (Andrews et al. 1990). Parasuraman, Zeithaml and Berry (1985) have developed SERVQUAL to measure service quality. Gronroos (2000, p.46) defined service as, A service is a process consisting of a series of more or less intangible activities that normally, but not necessarily always, take place in interactions between the customer and service employees and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems. Fogli (2006, p.4) define service quality as a global judgement or attitude relating to a particular service; the customers overall impression of the relati ve inferiority or superiority of the organization and its services. Service quality is a cognitive judgement. A study on customer perceptions and satisfaction towards home loans in Namakkal by Dr. M. Nallusamy1 (2012) explains that the satisfaction level of workers in relation to the services provided by Namakkal Urban Cooperative Bank Limited is very high. Different banks offer same product but their services differentiate and the bank has gone far in this direction. The higher satisfaction level among the respondents indicates that the bank is responsive to the needs and problems of the customers. The success of the housing companies in the market rest on the availability of customized product and also the service quality offered to customers. The future growth of the companies depends upon its qualitative service to the customers. At this juncture, the banks should evaluate their services and identify their distinction from others. Changing customer needs and uncertain economic conditions in are exerting pressure on housing companies while testing their ability to survive. The only way to succeed in the market is the formulation. Service Quality, Customer Involvement and Customer Satisfaction: A Case Study of Retail Banking in Bangladesh by Johra Kayeser Fatima2 and Mohammed Abdur Razzaque3 (2010) take 212 respondents as a sample. Researchers use exploratory factor analysis (EFA) as first sage of data analysis. This was followed by Confirmatory Factor Analysis (CFA) by Structural Equation Modeling (SEM) using AMOS version 17.0, which presents the final CFA model with the three constructs, namely customer involvement (CUSIN), service quality (SERVQ), customer satisfaction (SAT) and the items defining each of those variables. The researchers considered four hypotheses namely H1: Perceived service quality of the retail bank will have a positive effect on customer involvement, H2: Perceived service quality of the retail bank will
1

Dr. M. Nallusamy, Associate Professor, Department of Commerce, Kandasamy Kandar's College, Paramathi Velur (Tk), Namakkal (Dt) - 638 182, E-Mail: rajeshkannan381@gmail.com 2 Dr. Johra Kayeser Fatima, School of Marketing, Australian School of Business, The University of New South Wales, Sydney, Australia; johra23@hotmail.com. 3 Dr. Mohammed Abdur Razzaque, School of Marketing, Australian School of Business, The University of New South Wales, Sydney, Australia; ma.razzaque@unsw.edu.au .

have a positive effect on customer satisfaction, H3: Perceived customer involvement of the retail bank will have a positive, H4: Perceived customer involvement mediate service quality and customer satisfaction link. Data analysis reveals that both service quality and customer satisfaction impact the level of customer satisfaction in Bangladeshs retail banking sector. The findings of this research have important managerial implications for the decision makers in the Bangladeshi retail banking sector. Bank management must give due importance on improving service quality and customer involvement as both influence satisfaction of bank customers. Moreover, the proven mediating role of customer involvement in service quality-satisfaction relationship means that customer satisfaction and their perceptions of service quality can be manipulated by the degree of involvement that they have with the bank employees. Therefore, offering the same level of service quality by the bank can produce different levels of customer satisfaction, as customers have varying degrees of involvement with the banks employees. Perhaps nurturing good relationship with customers through the implementation of good relationship marketing would be a strategic imperative. Findings of this study may help bank management in addressing important questions pertaining to the banks resource allocation as well as picking correct investment project to gain long term market success. E-Banking and Customers Satisfaction in Bangladesh: An Analysis by Jannatul Mawa Nupur4 (2010) Has used the customer satisfaction as the dependent variable and the five dimensions of service quality are namely reliability, responsiveness, assurance, empathy, and tangibles as the independent variables. The author has run the OLS Regression model to determine the significance level of the variables for the customer satisfaction in e-banking. The basic model was as follows: Customer satisfaction in e-banking= f (reliability, responsiveness, assurance, empathy, and tangibles). Basically, CSEB= + 1x1 + 2x2+ 3x3+ 4x4 + 5x5 + e. A total of 400 questionnaires were distributed to the respondents. Author consider two hypothesis namely Ho (Null hypothesis): There is a relation between customer satisfaction in e-banking and reliability, responsiveness, assurance, empathy, and tangibles. Ho= 1 = 2 = 3 = 4 = 5 =0 and Ha (Alternative Hypothesis): There is no relation between customer satisfaction in ebanking and reliability, responsiveness, assurance, empathy, and tangibles. Ha= At least one is not zero. From the statistical analysis it is observed that there is a relation between customer satisfaction in e-banking and reliability, responsiveness, assurance, empathy, and tangibles as such null hypothesis is accepted and alternative hypothesis is rejected. Quality of Categorized Service and Customer Satisfaction in Banking Industry: An Empirical Study on Private Commercial Banks in Bangladesh by Md. Masukujjaman5 and Afia Akter6 (2010) differentiate banking services in three aspect namely the general banking service, foreign exchange service and loan service. The researchers think that total customer satisfaction is depend on those three aspects. All the Bangladeshi private commercial banks were taken as the population of the study and 480 customers are taken as the sample of the survey. Here the researcher also derive a model as Y = f (G, C, F) where Y is the Customer Satisfaction, and
4

Senior Lecturer in Marketing, Department of Business Administration, Northern University Bangladesh, Email:jmawa17141@gmail.com 5 Lecturer in Finance, Department of Business Administration, Northern University Bangladesh. E-mail: masuk_iba111@yahoo.com 6 Senior Lecturer in Finance, Department of Business Administration, Northern University Bangladesh. E-mail: afia_t@yahoo.com.

G,C,F are the service quality of General banking, Credit Banking, and Foreign Exchange banking respectively. The study showed that the overall service quality in private commercial bank in Bangladesh is considerable; still it is not sufficient for overwhelming satisfaction. To be more specific, the quality of perceived service in general banking services is better than the credit banking services and foreign exchange services, though their quality is not too bad. The banks holding higher Perceived Service Quality are providing best service in all categories of banking service. Besides, the banks holding lower Perceived Service Quality are struggling seriously with credit and foreign exchange services. Determinants of Customer Satisfaction of Banking Industry in Bangladesh by Mohammed Belal Uddin7 and Bilkis Akhter8 (2012) considered five hypotheses namely H1: Service quality has positive effect on perceived value in banking services, H2: Service quality has positive effect on customer satisfaction in banking services, H3: Fair service charge has positive effect on perceived value in banking services, H4: Fair service charge has positive effect on customer satisfaction in banking services and H5: Perceived value has positive effect on customer satisfaction in banking services. AMOS 17.0 was used as the analysis instrument and structural equation modeling (SEM) was employed in this study to test proposed model and hypotheses. Maximum likelihood method was adopted for parameter estimation. Measurement model and structural model test were used to test fitness of the model. The exploratory factor analysis (EFA) was performed to understand underlying relationship of factors. The results demonstrate that service quality and fair service charge both have direct positive influence on customer satisfaction. They have also indirect role on customer satisfaction through perceived value. This study contributes in the branch of consumer behavior in terms of theory development and managerial implications especially in banking industry in a developing country like Bangladesh. Customers Perception about the Determinants of Service Quality of Foreign andDomestic Banks: An Empirical Study on Bangladesh by Abu Bakkar Siddique9, Khondoker Sazzadul Karim10 and Md. Lutfor Rahman11 (2011) construct a model for the explanation of customer perception. The model is known as SERVQUAL Model. Model for the study was the following: Overall Service quality = f (reliability, responsiveness, Competence, Accessibility, Courtesy, Communication, Credibility, Security, Understanding/knowing, Tangibility). Specifically, SERVQUAL = + 1X1 +2X2 +3X3 + 4X4 + 5X5 + 6X6 + 7X7+8X8 +9X9+10+ e. Where,SERVQUAL = Overall service quality of bank, X1 = Reliability, X2 = Responsiveness, X3 = Competence, X4 = Accessibility, X5 = Courtesy, X6 = Communication, X7 = Credibility, X8 = Security, X9 =Understanding/Knowing, X10 = Tangibility, Where, is constant and 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 are coefficients to estimate, and e is the error term, which the authors assumed as NID for that research. This study indicates that reliability, credibility and tangibility are common attributes determining the customer satisfaction for both foreign and
7

Mohammed Belal Uddin, Assistant Professor, Department of Accounting & Information Systems, Comilla University, Kotbari, Comilla 3503, Bangladesh, Email: belal_137@yahoo.com 8 Assistant Professor, Department of Accounting & Information Systems, University of Dhaka, Dhaka 1000, Bangladesh, Email: bilkis_akhter@ yahoo.com 9 Abu Bakkar Siddique Treasurer, Northern University Bangladesh (NUB), Dhaka. 10 Khondoker Sazzadul Karim, Associate Professor, Faculty of Business, Northern University Bangladesh (NUB), Dhaka. 11 Md. Lutfor Rahman, Associate Professor, Faculty of Business, Northern University Bangladesh (NUB), Dhaka.

domestic banks. However the customer feel more secured and are able to communicate better for the domestic banks rather than those of the foreign banks.

Objectives of the Study

The focus of the study is to find out the relationship between service quality and customer satisfaction of House Building Finance Corporation. The specific objectives are: > To identify the perceived service quality by the customers of the corporation. > To rank the determinants of service quality and understanding satisfaction level of the customers. > To ascertain the other relevant dimensions of customer satisfaction. > To offer suggestions, if needed, based on the analytical results of the current study.

Limitations of the study

Here we will consider only 30 individuals as sample. If we could consider more sample that would be represent more accurate result and findings. The survey will conducted on single branch in Rajshai. So, country wide survey could provide more representative findings.

Research Methodology
For fulfilling the research objectives primary source will be used. Interview technique will be used with structured questionnaire for the collection of primary data. The judgmental sampling procedure will be used to select the sample units from different customers who are willing to respond to the questionnaire. 30 customers are taken as the sample of the survey. The survey will administer in July 2013. Few statistical tools such as Mean, Standard Deviation, Correlation will be used for the analysis. Mean is arithmetic average and standard deviation is measure of dispersion or variation (Fallik and Brown, 1983). Correlation shows a relation that exists between two or more variables (Wolff and Pant, 2003).

A tentative chapter Schedule

1. 2. 3. 4. INTRODUCTION AN EMPIRICAL INVESTIGATION SUMMARY
REFERENCES

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