THE IMPACT OF CUSTOMER SERVICE QUALITY ON CUSTOMER LOYALTY THROUGH CUSTOMER SATISFACTION: A STUDY ON THE ISLAMIC BANKS IN SOMALIA

Purpose – This study aims to examine the impact of service quality on customer satisfaction and loyalty in Islamic banks of Somalia using the structural equation model (SEM).

Design/methodology/approach – This study utilizes assurance, formality, reliability, sincerity and tangibility, and personalization constructs. A survey was distributed to 316 customers of Islamic banks in Mogadishu, Somalia. The survey was conducted using the convenience sampling technique and our respondents were current and potential customers of Islamic banks in Somalia. The data were analyzed by employing a quantitative measure of structural equation modeling employing Smart-PLS 3.3.7.

Findings – The findings revealed that formality, reliability, sincerity, and tangibility have a positive and significant influence on customer satisfaction of Islamic banks in Somalia, whereas assurance and personalization have indicated an insignificant relationship with customer satisfaction. Furthermore, when customer satisfaction is mediating between service quality constructs and customer loyalty, it shows a positive significant relationship with customer loyalty.

Originality/value – This research is an original attempt for examining the determinants of service quality constructs on customer satisfaction and customer loyalty in Somalia. Therefore, it presents a unique contribution to the banking industry in the context of Somalia.