Assessing customer service delivery of mobile van banking in rural areas – the case of NBS bank Lilongwe branch service centres

Abstract

Traditionally, banks and other formal financial institutions in Malawi have avoided or indeed failed to offer sustainable financial services in rural areas. In order to keep up with the modern competitive banking environment, banks are devising various strategies to reach out and grow their customer base and one of such strategies is the mobile van banking. Mobile van banking which is popularly known as ‘Bank on Wheels’ has provided a platform for banks in Malawi to reach out to its existing and potential customers especially those based in rural areas and this provided the banks an opportunity to grow their customer base. Additionally, reaching out to rural people with banking services through mobile van banking also has a very important implication on the provision of financial services to rural masses; thus contributing towards the achievement of financial inclusion, a very important agenda for most governments in developing countries like Malawi. Customer service has become an important aspect which customers use for differentiating service providers, more especially in the highly competitive banking industry. As most banks offer similar products and services, customer service is therefore the most important factor in maintaining as well as increasing market share for commercial banks in Malawi. In 2007, NBS Bank introduced its mobile van banking services in order to ensure that it meets the growing demand for banking services in rural especially in rural areas. The study sought to find out whether NBS Bank Lilongwe Branch’s mobile van initiative for service delivery in rural areas is contributing towards customer service and the study also highlights areas of improvement for mobile van banking in Malawi. The study used questionnaires and face-to-face interviews to collect data from the respondents. The population for the study was 1,000 mobile van customers, thus according to NBS Bank Mobile Van Quarterly Report (December 2016). The study adopted a sample size of 100 mobile van customers, representing 10 percent of the population. The sample size was considered reasonable and adequate for the research. Simple random sampling technique was adopted through testing every nth member of the population to ensure that mobile van customer had equal chance of being selected into the sample. The study revealed the crucial role that mobile van banking is playing towards customer service, specifically in reducing travel distances and associated travel costs, enhancement of a xii saving culture among the rural households and provision of other banking services to people in the rural areas. The study also highlighted unreliable network, frequent power supply interruptions, absenteeism and security shortfalls, as some of the challenges affecting mobile van banking service delivery at NBS Bank Lilongwe service centres. All in all, addressing these challenges plus consideration of setting up physical branches in mobile van designated centres might enhance the bank’s customer service delivery.