Financial Intermediation in an African Setting

Abstract

ABSTRACT This paper analyzes whether multinational, domestic national and domestic rural banks are perceived differently by consumers in a developing economy-Ghana. The paper investigates the critical determinants of consumer perceived product and service quality for each type of institution in the Ghana banking industry. The evidence shows variation in bank quality in the sense that multinational banks are perceived more positively than both types of domestic banks on the dimensions of transactional and relational customer service, but they are viewed more negatively for benefits advertised in promotions and interest rate on savings accounts. Unexpectantly, multinational banks have a competitive advantage with respect to both technology and human relationship management. Their competitive advantage enables multinational banks to pay lower interest rates on deposits.