Impact of service quality dimensions on customer satisfaction in priority sector lending

Priority Sector Lending (PSL) is a financial inclusion strategy that encourages banks to support vital industries for stimulating economic expansion. This study aims to analyse how different service quality parameters affect customer satisfaction. The 339 people who used PSL for agricultural and educational loans provided responses. Path analysis using Structural Equation Modelling (SEM) was used to assess the impact of the five dimensions on customer satisfaction. The results of the path analysis revealed that only reliability, responsiveness and tangibility have significantly impacted customer satisfaction. There exists an opportunity for improvement in the extent to which bankers demonstrate assurance and empathy during the loan processing phase of the priority sector lending scheme. The study provides valuable insights for employees and customers alike, shedding light on the nature of the services rendered and received. Furthermore, the results of this research can inform policy makers in making decisions aimed at promoting the delivery of outstanding customer service.