SERVICE QUALITY AS A MODERATING FACTOR TOWARDS ENHANCING CUSTOMER LOYALTY (A STUDY OF OPAY MICROFINANCE BANK, LAGOS)

ABSTRACT This research project investigates the moderating role of service quality in the context of customer loyalty within the banking industry, with a specific focus on Opay Microfinance Bank. The study addresses several essential objectives, starting with an examination of the impact of service quality on customer loyalty in this specific banking sector. It further identifies and analyzes the key dimensions of service quality that significantly influence customer loyalty. Additionally, the research formulates effective strategies to enhance service quality and foster greater customer loyalty within Opay Microfinance Bank. The study also evaluates the extent to which service quality moderates the relationship between customer satisfaction and customer loyalty. To accomplish these objectives, a comprehensive literature review is conducted, drawing insights from prior research and identifying the research gap. The research employs a survey method and a simple random sampling technique, with questionnaires as the primary research instrument. The data collected from 390 respondents are subjected to correlation analysis for rigorous data analysis. The findings reveal that service quality significantly impacts customer loyalty, with particular dimensions, such as lower fees, efficient services, user-friendly digital banking, better interest rates, and improved customer service, playing crucial roles. Furthermore, the research recommends strategies to enhance service quality, such as staff training, digital service improvements, better communication channels, personalized customer support, and expanding branch accessibility. This research contributes to a deeper understanding of the dynamics of customer loyalty within the banking sector, offering insights and recommendations that can benefit Opay Microfinance Bank and similar institutions.