Service quality, customer satisfaction and loyalty: a case study in Vietnamese SMEs

Hang, Nga Phan Thi; Trung, Nguyen Kim Quoc Article Service quality, customer satisfaction and loyalty: a case study in Vietnamese SMEs Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Hang, Nga Phan Thi; Trung, Nguyen Kim Quoc (2024) : Service quality, customer satisfaction and loyalty: a case study in Vietnamese SMEs, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-15, https://doi.org/10.1080/23311975.2024.2377769 This Version is available at: https://hdl.handle.net/10419/326433 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Service quality, customer satisfaction and loyalty: a case study in Vietnamese SMEs Nga Phan Thi Hang & Nguyen Kim Quoc Trung To cite this article: Nga Phan Thi Hang & Nguyen Kim Quoc Trung (2024) Service quality, customer satisfaction and loyalty: a case study in Vietnamese SMEs, Cogent Business & Management, 11:1, 2377769, DOI: 10.1080/23311975.2024.2377769 To link to this article: https://doi.org/10.1080/23311975.2024.2377769 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 13 Jul 2024. Submit your article to this journal Article views: 4295 View related articles View Crossmark data Citing articles: 2 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 ManageMent | ReseaRch aRticle Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2377769 Service quality, customer satisfaction and loyalty: a case study in Vietnamese SMEs nga Phan thi hang and nguyen Kim Quoc trung Faculty of accounting - auditing, university of Finance – Marketing, Ho Chi Minh City, Vietnam ABSTRACT this study assesses how various aspects of loan service quality in Vietnamese commercial banks impact the satisfaction levels of small and medium enterprises (sMes) and their relationship with customer loyalty to these banks. implementing both qualitative methods (such as group discussions, expert interviews, and customer surveys) and quantitative methods (including partial least squares structural equation modeling (Pls-seM)), the authors identified and analyzed five dimensions of loan service quality— tangibility, reliability, assurance, responsiveness, and empathy—that positively influence sMe satisfaction within these banks. additionally, this study explores the connection between sMe satisfaction and loyalty, recognizing it as a crucial factor for improving operational efficiency and gaining a competitive advantage in facilitating banking transactions. 1. Introduction as stated by the asian Development Bank (2023), small and medium enterprises (sMes) continue to serve as significant catalysts for economic growth in developing asia and the Pacific. amidst the ongoing global uncertainties stemming from geopolitical tensions and shifting supply chains, it is imperative to emphasize the advancement of sMes to bolster their domestic impact on sustainable development. sMes fulfill diverse functions within developing economies and encounter various obstacles. specifically, fostering the growth of sMes and enhancing financial inclusion are crucial for promoting a more equitable and robust economic growth trajectory throughout developing asia and the Pacific (asian Development Bank, 2023). Due to limited resources like finance, technology, and human capital, small and medium enterprises (sMes) are compelled to seek diversified funding sources to support their operations and explore alternative avenues for enhancing their performance. compared with large corporations, sMes face unique challenges related to ownership structures, economies of scale, collateral, and information disclosure disparities, which pose obstacles to approaching financial resources (Mirza et al., 2023; Rabbani etal., 2023; Rehman et al., 2023). thus, to accelerate their development process, bank lending to sMes is essential for economic growth because, according to Rehman et al. (2023), sMes have produced 60–70% of the total world employment and over 50% of the world’s gross domestic product (gDP). in the global economy, Vietnamese sMes appear to be quite innovative and productive because of their adoption of information and technology. state-owned commercial banks finance sMes in Vietnam, covering approximately half of total sMe loans. sMe lending constitutes 22% of the country’s overall © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT nguyen Kim Quoc trung [email protected] university of Finance – Marketing, Ho Chi Minh City, Vietnam. https://doi.org/10.1080/23311975.2024.2377769 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 27 september 2023 Revised 17 May 2024 accepted 3 July 2024 KEYWORDS service quality; loans; customer loyalty; customer satisfaction; small and medium enterprises REVIEWING EDITOR Pablo Ruiz, Universidad de castilla-la Mancha, spain SUBJECTS entrepreneurship and small Business Management; small Business Management; Organizational Behaviour; Banking 2 n. Phan thi hang anD n. KiM QUOc tRUng bank lending (OecD, 2021). to improve sMes’ access to finance, fostering increased competition in credit markets is crucial. this could involve initiatives such as promoting the emergence of alternative lending institutions and expanding the utilization of loan guarantees to sMes. in particular, the state Bank of Vietnam (sBV) has effectively managed its monetary and credit policies proactively, flexibly, and consistently. this aimed to facilitate access to bank loans for businesses and individuals, thereby fostering their production and commercial endeavors. there has been notable progress in enhancing the legal framework governing credit institutions’ lending operations, empowering them with greater decision-making authority and accountability, especially concerning loans to sMes, as per the credit institutions law. this legal framework has eased access to credit and alleviated the obstacles faced by all customers, including sMes. consequently, there is a positive outcome in sMes’ credit. Practical evidence from to 2018-2022 period illustrates this success. the average annual credit growth rate for sMes stood at 14.17%, surpassing the overall credit growth rate of the economy. By the end of 2022, credit extended to sMes increased by 8.28% compared to the previous year, constituting nearly 19% of the total credit in the economy. On March 14, 2023, the sBV reduced the short-term lending interest rate by 0.5% for certain sectors and industries, aiming to support cost reductions for customers in borrowing (now standing at 5% per annum) (nguyen, 2023). Practical evidence from to 2018-2022 period illustrates this success. the average annual credit growth rate for sMes stood at 14.17%, surpassing the overall credit growth rate of the economy. By the end of 2022, credit extended to sMes increased by 8.28% compared to the previous year, constituting nearly 19% of the total credit in the economy. On March 14, 2023, the sBV reduced the short-term lending interest rate by 0.5% for certain sectors and industries, aiming to support cost reduction for borrowing (nguyen, 2023). Quality is the cornerstone of the service industry and is crucial for satisfying customers and fostering loyalty (hasan etal., 2016; Kumar et al., 2009). Within the banking sector, quality is paramount for delivering a value chain of financial services to customers in the monetary domain. as such, the primary aim of this research is to investigate how factors related to loan service quality influence the satisfaction of small and medium enterprises (sMes) and their relationship with sMes’ loyalty. in pursuit of the objective, we will explore the following research question: ‘to what extent, does the sMes’ satisfaction intervene the effect of loan service quality on sMes’ loyalty in Vietnamese commercial banks?’ 2. Literature review and hypothesis development 2.1. Literature review service quality is covered in the theoretical frameworks and models proposed by cronin and taylor (1992), grönroos (1984), and Parasuraman et al. (1985). grönroos (1984) explains that service quality is evaluated by comparing the value that customers anticipate before using a service with the value they perceive after using the service. Parasuraman et al. (1985) define service quality as the gap between customer expectations and perceptions after experiencing a service. the author’s group constructed and developed the seRVQUal scale, comprising 22 pairs of observed variables that measure customers’ perceptions and expectations of service quality, with five fundamental components: (1) tangibles, (2) reliability, (3) responsiveness, (4) assurance, and (5) empathy. as highlighted by cronin and taylor (1992), a conceptualization and method exists for measuring service quality and its association with consumer satisfaction and purchase intentions. their study involved comparing computed difference scores and perceptions, leading to the conclusion that perceptions alone are a more reliable predictor of service quality. to measure the perceived service quality provided by the banking sector in this study, Parasuraman’s seRVQUal model was chosen because it has been widely used (hasan et al., 2016; izah and Wan Zulqurnain, 2005; Munusamy et al., 2010). Drawing from researchers’ insights into service quality, loan service quality within the operational framework of commercial banks is defined by its alignment with customers’ credit service expectations and fulfillment of their requirements. in the modern economy, with the advancement of the commerce and service sectors, service quality has emerged as a critical component of customer satisfaction, with the two concepts closely intertwined. according to Wilson et al. (2016), although service quality and customer satisfaction share certain cOgent BUsiness & ManageMent 3 similarities, customer satisfaction tends to encompass a broader spectrum. By contrast, service quality specifically targets distinct aspects of a service. this viewpoint is supported by the findings of shrestha and Koirala (2012). Both service quality and customer satisfaction are frequently evaluated through a gap approach, which involves assessing the variance between perceptions and expectations (Rust et al., 1999). the discrepancy between service quality and customer satisfaction largely stems from differing definitions of expectations. in the theory of service quality, customer expectations are defined as the wants (needs) of consumers, which customers feel that a service provider should offer them rather than what the service provider will offer’ (Martinaityte et al., 2019; Mbango, 2019). according to anderson and Jacobsen (2000), customer loyalty is the outcome of an organization providing benefits to customers, leading them to maintain or even increase their purchases from that organization. they assert that customer satisfaction is a precursor to customer loyalty. there is a growing acknowledgment that the primary goal of measuring customer satisfaction should be to foster customer loyalty (singh, 2006; sivadas and Baker-Prewitt, 2000). Research conducted by Maswadeh (2015), Qadeer (2014), Raza et al. (2020), shanmugam (2022), and Zhou et al. (2021) has revealed the impact of service quality on customer satisfaction within the global banking sector. conversely, Bui (2022), le (2016), Phung (2020), and to and Vo (2020) focused on Vietnam. however, these authors limited their investigations to individual banks or branches and omitted customer loyalty in their models. consequently, this study seeks to address this gap by examining the mediating role of sMes’ satisfaction in the relationship between loan service quality and loyalty within the Vietnamese banking sector. 2.2. Hypothesis development 2.2.1. Tangibility affects customer satisfaction according to santos (2002), tangibility constitutes a dimension of service quality as identified by Parasuraman et al. (1988). it denotes the tangible aspects of services, encompassing the appearance of physical facilities, tools, equipment, personnel, communication materials, other physical features utilized in service delivery, and the presence of other customers in the service environment. in a recent investigation by Khan et al. (2021), tangibility was related to the physical infrastructure, equipment, staff, and specialized tools engaged in service provision. tangibles include physical assets, instruments, and machinery used in service delivery, such as loans, cards, and deposits (Rahaman et al., 2020). these authors assert that tangibility also involves elements such as external appearance, bank counters, facilities, operating hours, and speed and efficiency of transactions. evidence from studies by Fida et al. (2020), Kant and Jaiswal (2017), and Rahman et al. (2017) indicates a significant positive impact of tangibility on customer satisfaction within the banking industry. When transactions occur under pleasant conditions, consumers tend to feel more satisfied with the services provided by the company. consequently, the tangible dimension enhances employee readiness to respond promptly to consumers’ needs. it has been observed that the quality of tangibles an organization provides directly correlates with the level of service delivered to consumers (Balinado etal., 2021; ngaliman and suharto, 2019). hypothesis 1: tangibility has a positive effect on the satisfaction of sMe customers. 2.2.2. Reliability affects customer satisfaction Parasuraman et al. (1988) introduced the pivotal concept that reliability is the cornerstone of service performance, as highlighted by Rahaman et al. (2020). Reliability holds a primary position within the seRVQUal framework for measuring the service quality. Baumann et al. (2017) define it as the degree to which customers can rely on the service provided by a business entity. among the dimensions of service quality, reliability is regarded as fundamental in influencing customer satisfaction (Zhang et al., 2019). it signifies the commitment to deliver promised services and complements operational precision (s and 4 n. Phan thi hang anD n. KiM QUOc tRUng Devesh, 2019). Moreover, reliability entails the capability to deliver promised services consistently and the organization’s trustworthiness, particularly in providing services promptly and as agreed upon (Bungatang and Reynel, 2021). Research conducted by Kant and Jaiswal (2017) and Pakurár et al. (2019) provides robust evidence of a significant correlation between reliability and customer satisfaction within the banking sector. Khan et al. (2021) explored the positive relationship between the reliability of mobile banking services and customer satisfaction. hypothesis 2: Reliability has a positive effect on the satisfaction of sMe customers. 2.2.3. Responsiveness affects customer satisfaction Parasuraman et al. (1988) emphasized that employee responsiveness encompasses various aspects, including providing accurate completion estimates to customers, offering undivided attention, promoting helpfulness, and aligning responses with customer needs. Responsiveness evaluates the speed at which employees deliver timely and appropriate assistance, as noted by endara et al. (2019). this capability to promptly fulfill assigned tasks, manually or electronically, is termed responsiveness, according to Uddin et al. (2015). Vencataya et al. (2019) confirmed that responsiveness significantly predicts customer satisfaction in the banking sector of Mauritius. Moreover, responsiveness has been shown to significantly influence customer satisfaction in various studies significantly (abdelhadi, 2021; Kant and Jaiswal, 2017; Khan et al., 2021; Rahaman et al., 2020). it is essential to define responsiveness as employees’ willingness or desire to assist and provide the services required by consumers (Rahaman et al., 2020). allowing consumers to wait, especially without an apparent reason, can create a negative impression that should be avoided at all costs. addressing such errors promptly is not just crucial, but also of utmost importance, as it can significantly impact the overall customer experience (Bungatang and Reynel, 2021). hypothesis 3: Responsiveness has a positive effect on the satisfaction of sMe customers. 2.2.4. Assurance affects customer satisfaction grönroos (1984) initially identified assurance as the foremost dimension of service quality, although Parasuraman et al. (1994) later positioned it fourth. assurance encompasses expertise, courtesy, and employees’ ability to inspire trust and confidence during interactions (Zeithaml et al., 1990). this dimension involves keeping customers well-informed in a language they understand and attentively listen to, regardless of their educational background, age, or nationality. assurance is closely linked to the sense of security that customers feel during banking transactions (ennew etal., 2013) and exhibits a direct and positive correlation with customer satisfaction in the banking sector (Pakurár et al., 2019). Balinado et al. (2021) highlight assurance as a fundamental dimension of service quality that significantly influences customer satisfaction. they emphasized that the demonstration of acquired knowledge by staff in catering to customer preferences during service delivery can be highly assuring. empirical studies show a favorable connection between assurance and customer satisfaction (etana, 2021; Kant and Jaiswal, 2017; Khan et al., 2021; Yarimoglu, 2014). hypothesis 4: assurance has a positive effect on the satisfaction of sMe customers. 2.2.5. Empathy affects customer satisfaction Empathy is defined as an individual’s reaction to others’ observed experiences (Davis, 1983). this finding suggests that empathy encompasses both cognitive and emotional responses. it entails consideration, personalized attention, and provision of customized services to clients (Parasuraman et al., 1994). empathy involves fostering the perception that each customer is unique. Quantitative research cOgent BUsiness & ManageMent 5 on service quality has consistently focused on safety, trustworthiness, and empathy. empathy is fundamental to supportive and compassionate interactions, making it indispensable to service provision (Bove, 2019). empathy involves service providers demonstrating care, offering personalized attention to customers, treating them as valuable assets, and consistently displaying courtesy (Mi Jeon etal., 2013). these behaviors also play a pivotal role in determining consumer loyalty (Prentice, 2013). as stated in Balinado etal. (2021), gunasekar et al. (2021), Khan et al. (2021), and Markovic et al. (2018), empathy positively affects customer satisfaction. hypothesis 5: empathy has a positive effect on the satisfaction of sMe customers. 2.2.6. Customer satisfaction affects customer loyalty the loyalty of a firm’s customers has been recognized as the dominant factor in a business organization’s success (Kandampully and suhartanto, 2000). customer satisfaction is paramount in all marketing endeavors of a market-oriented firm. it is crucial for fulfilling the firm’s objectives, including business expansion, securing a larger market share, and fostering repeat and referral businesses, all of which contribute to enhanced profitability (Barsky, 1992). Research by cronin and taylor (1992) in various service sectors, including banking, has revealed that customer satisfaction strongly influences future purchase intentions. they posit that satisfaction increases the likelihood of customers continuing to engage with a firm, thus fostering ongoing transactions. similarly, Mcalexander et al. (1994) discovered that patient satisfaction and service quality significantly impacted future purchase intentions in the healthcare sector. Maintaining customer loyalty to bank services is crucial for the long-term survival of a bank organization on a global scale (supriyanto et al., 2021). service quality and customer satisfaction are key factors that must be investigated to understand their influence on customer loyalty. Organizations that foster customer loyalty tend to experience higher levels of customer satisfaction (supriyanto et al., 2021). ariff et al. (2013) emphasize that customers remain loyal only when they are satisfied with the services provided. hypothesis 6: customer satisfaction positively affects the loyalty of sMe customers. 3. Methodology 3.1. Sample according to hair et al. (2017), the recommended range for the minimum sample size is between 100 and 150, or a minimum of five times the sample size required to estimate a parameter, as indicated by Bollen (1989). to establish an adequate sample size for this research, the authors opted for Bollen’s (1989) approach, which involves computing n*5 observations, where n represents the estimated parameter or scaling factor for the variables under consideration. a total of 411 forms were issued, with 376 forms collected after the survey, representing 91.5% of the distributed forms. this meets the requirements for both the quantity and composition of the sample. consequently, the sample size suitable for analysis includes 376 observations. 3.2. Research model 3.3. Methodology the study employed a combined approach involving both qualitative and formal research methods. Data collection was conducted through verbal interviews with participants using qualitative techniques. notably, these individuals provided written informed consent, allowing the researchers to exclusively 6 n. Phan thi hang anD n. KiM QUOc tRUng utilize the gathered information for this study and its subsequent publication in an academic journal. the interview participants typically included experts and professionals, such as credit officers, supervisors, and managerial personnel from selected commercial banks in ho chi Minh city. expert interviews were conducted in the preliminary research phase to identify the factors influencing the loan service quality of sMes customers at selected Vietnamese commercial banks. these factors were refined and adjusted based on the proposed research model. Based on the expert consensus rate calculation, the identified factors were re-evaluated to ensure relevance within the Vietnamese context. the assessment of expert interview reliability was determined using Krippendorff’s alpha coefficient (Kalpha), a metric used to gauge reliability quality in expert interviews (hayes and Krippendorff, 2007). notably, they established that a Kalpha value of 1 signifies perfect reliability or a dependable consensus ratio, whereas a Kalpha values of 0.8 are generally accepted as the benchmark for good reliability, does not fall below 0.6. consequently, factors with an expert consensus rate in the paper of 75% m, which exceeds 60 percent, encompassing reliability, relevance, timeliness, confidentiality, and ease of use as outlined by experts, were retained. the following factors were included in the seRVQUal model: reliability, responsiveness, assurance, tangibles, and empathy (Parasuraman et al., 1988). Following the expert interviews’ results, five validated and adjusted elements–reliability, responsiveness, assurance, tangibles, and empathy (Figure 1) – were chosen to assess their impact on sMes’ satisfaction. subsequently, quantitative research was conducted to refine the initial scales established during the qualitative phase. the survey was designed by considering constructs measured using and adapting existing scale items from the literature and previous studies (appendix 1). Responses were rated on a five-point likert scale, ranging from ‘completely disagree’ to ‘completely agree.’ a double-masked back-translation process translated the items from Vietnamese to english. Following this qualitative study, the outcomes led to the creation of a survey questionnaire for sMe customers. the authors encoded these scales and utilized smartPls software to assess scale reliability, perform exploratory factor analysis, and construct multiple linear regression models based on aggregated survey data. Various tests were executed to ensure the robustness and reliability of the research findings. 3.4. Ethical approval statement Research methods encompass both qualitative and quantitative approaches. the qualitative method of research focuses on interviews with banking experts. the authors approached these experts, who had participated in previous conferences—specifically, the conference of Finance for sustainable Development 2023, the international conference on Business Based on Digital Platform (BDP 3), and the 8th international conference on accounting and Finance (icOaF 2023)—by scheduling appointments for in-depth interviews. Participation in the study was secured by obtaining the interviewees’ agreement to discuss banking-related information through a structured questionnaire during the in-depth interviews. this process aimed to identify the factors influencing the research and allowed the information to be disclosed Figure 1. Research model. cOgent BUsiness & ManageMent 7 in this article. Furthermore, the interviewees consented to and assigned all rights to the authors to use the verbal data for this study. additionally, all questions were designed based on the interviewees’ knowledge and skills to provide evidence supporting the authors’ assessments. the University of Finance – Marketing’s ethics committee granted ethical approval to the researchers. During data collection, the researchers adhered to the Decree on the Protection of Personal Data (Decree no. 13/2023/nD-cP, april 17, 2023) (Vietnam, 2023), ensuring the anonymity and confidentiality of the respondents throughout the study. 4. Research results and discussions 4.1. Research results First, the reliability and validity of constructs are shown in table 1. Based on table 1, the author tested the construct reliability by calculating cronbach’s alpha and composite reliability for each construct. all constructs have cronbach’s alpha values above 0.7, which suggests that the constructs are acceptable (taber, 2018). in addition, according to hair et al. (2017), the composite reliability (cR) and average variance extracted (aVe) should be greater than 0.7, and 0.5 respectively to establish reliability and convergent validity, respectively. all the constructs satisfy the conditions of cR and aVe, so they have reliability and convergent validity. table 2 presents the evaluation of discriminant validity using the Fornell-larcker criterion as recommended by Fornell and larcker (1981). this criterion is widely employed to assess the extent of common variance among the latent variables within the model. the Fornell-larcker criterion is met when the square root of average Variance extracted (aVe) values is greater than the (partial) cross-loadings in the corresponding column and row (Fornell and larcker, 1981), affirming the robust discriminant validity of the scales. to assess discriminant validity using the Pls approach, heterotrait–Monotrait correlation values below 0.900 were considered acceptable (henseler et al., 2015). the computed values, as presented in table 3, fall below this threshold, confirming the acceptance of discriminant validity. these results underscore the reliability and validity of the measurement scales (henseler etal., 2015), thus establishing the validity of the research model. Furthermore, both the predictive capability of the model and causal relationships among the variable constructs were statistically significant (Figure 2). Figure 2 illustrates that the R-squared value for the estimated equation is 0.567, signifying statistical significance at the 1 percent level. Furthermore, the adjusted R-square indicates that 56.7% of the variation in the satisfaction of customers of small and medium-sized enterprises (sMes) can be attributed to factors such as tangibility, reliability, responsiveness, assurance, and technological innovation. Table 1. Composite reliability. Cronbach’s alpha Composite reliability (CR) average variance extracted (aVe) a 0.882 0.882 0.628 CL 0.917 0.915 0.809 e 0.854 0.872 0.641 R 0.809 0.836 0.593 Re 0.878 0.884 0.707 sa 0.998 0.998 0.996 ta 0.964 0.967 0.903 Table 2. Composite reliability. a CL e R Re sa ta a 0.793 CL 0.289 0.899 e 0.382 0.417 0.800 R 0.333 0.443 0.601 0.770 Re 0.428 0.509 0.578 0.498 0.841 sa 0.530 0.577 0.627 0.626 0.618 0.998 ta 0.327 0.350 0.508 0.539 0.469 0.536 0.950 14 n. Phan thi hang anD n. KiM QUOc tRUng Rahaman, M. a., ali, M. J., Kejing, Z., taru, R. D., & Mamoon, Z. R, school of economics & Management, Jiujiang University, Jiangxi, china. (2020). investigating the effect of service quality on bank customers’ satisfaction in Bangladesh. The Journal of Asian Finance, Economics and Business, 7(10), 823–829. https://doi.org/10.13106/ jafeb.2020.vol7.n10.823 Rahman, a., hasan, M., & Mia, M. (2017). Mobile banking service quality and customer satisfaction in Bangladesh: an analysis. The Cost and Management, 45(2), 25–32. Raza, s. a., Umer, a., Qureshi, M. a., & Dahri, a. s. (2020). internet banking service quality, e-customer satisfaction and loyalty: the modified e-seRVQUal model. The TQM Journal, 32(6), 1443–1466. https://doi.org/10.1108/ tQM-02-2020-0019 Rehman, s. U., al-shaikh, M., Washington, P. B., lee, e., song, Z., abu-alsondos, i. a., shehadeh, M., & allahham, M. (2023). Fintech adoption in sMes and Bank credit supplies: a study on Manufacturing sMes. Economies, 11(8), 213. https://doi.org/10.3390/economies11080213 Rust, R. t., inman, J. J., Jia, J., & Zahorik, a. (1999). What you don’t know about customer-perceived quality: the role of customer expectation distributions. Marketing Science, 18(1), 77–92. https://doi.org/10.1287/mksc.18.1.77 s, a., & Devesh, s. (2019). service quality dimensions and customer satisfaction: empirical evidence from retail banking sector in Oman. Total Quality Management & Business Excellence, 30(15-16), 1616–1629. https://doi.org/10.1080 /14783363.2017.1393330 santos, J. (2002). From intangibility to tangibility on service quality perceptions: a comparison study between consumers and service providers in four service industries. Managing Service Quality: An International Journal, 12(5), 292–302. https://doi.org/10.1108/09604520210442083 shanmugam, J. K. (2022). an empirical research on factors affecting customer satisfaction towards fintech products and services in sungai Petani, Kedah. Journal of Academia, 10(2), 122–135. shrestha, s., & Koirala, K. D. (2012). Measuring service quality and customer satisfaction: empirical evidence from nepalese commercial banking sector undertakings. Management Dynamics, 16(1), 10–20. singh, h. (2006). the importance of customer satisfaction in relation to customer loyalty and retention. Academy of Marketing Science, 60(193–225), 46. sivadas, e., & Baker-Prewitt, J. l. (2000). an examination of the relationship between service quality, customer satisfaction, and store loyalty. International Journal of Retail & Distribution Management, 28(2), 73–82. https://doi. org/10.1108/09590550010315223 supriyanto, a., Wiyono, B. B., & Burhanuddin, B. (2021). effects of service quality and customer satisfaction on loyalty of bank customers. Cogent Business & Management, 8(1), 1937847. https://doi.org/10.1080/23311975.2021.1937847 taber, K. s. (2018). the use of cronbach’s alpha when developing and reporting research instruments in science education. Research in Science Education, 48(6), 1273–1296. https://doi.org/10.1007/s11165-016-9602-2 to, t. h., & Vo, t. h. n. (2020). Factors affecting the retail banking services at hdbank - an giang province branch. Industry and Trade Magazine, 2020, 1–6. Uddin, K. s., nipa, n. J., & Rashid, M. (2015). identification the factors influencing customer satisfaction on service quality in Jamuna Bank. International Journal of Business and Economic Research, 4(2), 30–35. Vencataya, l., Pudaruth, s., Juwaheer, R., Dirpal, g., & sumodhee, n. (2019). assessing the impact of service quality dimensions on customer satisfaction in commercial banks of Mauritius. Studies in Business and Economics, 14(1), 259–270. https://doi.org/10.2478/sbe-2019-0020 Wilson, a., Zeithaml, V., Bitner, M. J., & gremler, D. (2016). Services marketing: Integrating customer focus across the firm (3rd ed.). london: Mcgraw hill. Yarimoglu, e. K. (2014). a review on dimensions of service quality models. Journal of Marketing Management, 2(2), 79–93. Zeithaml, V. a., Parasuraman, a., & Berry, l. l. (1990). Delivering quality service: Balancing customer perceptions and expectations. simon and schuster. Zhang, J., Zhang, J., & Zhang, M. (2019). From free to paid: customer expertise and customer satisfaction on knowledge payment platforms. Decision Support Systems, 127, 113140. https://doi.org/10.1016/j.dss.2019.113140 Zhou, Q., lim, F. J., Yu, h., Xu, g., Ren, X., liu, D., Wang, X., Mai, X., & Xu, h. (2021). a study on factors affecting service quality and loyalty intention in mobile banking. Journal of Retailing and Consumer Services, 60, 102424. https://doi.org/10.1016/j.jretconser.2020.102424 cOgent BUsiness & ManageMent 15 APPENDIX Iscales of the study. no CoDe/ FaCtoR iteM souRCes 1 tangibility 1.1 ta1 Commercial banks modern machinery. Fida et al. (2020) and Balinado et al. (2021)1.2 ta2 Commercial banks feature good facilities, a spacious building, and a well-organized layout. 1.3 ta3 Commercial banks offer brochures containing comprehensive information about loan services for small and medium-sized enterprises. 1.4 ta4 Commercial banks have enough spaces for customer parking. 2 Reliability 2.1 Re1 Commercial banks deliver loan services in line with its commitments to small and medium-sized enterprises. Fida et al. (2020) and Balinado et al. (2021) 2.2 Re2 all the discussed loan services to small and medium-sized enterprises were done accurately. 2.3 Re3 Commercial banks ensure customers’ transactions and records are kept confidential. 2.4 Re4 Commercial bank staff clearly and convincingly explain loan services for small and medium-sized enterprises, providing detailed instructions. 2.5 Re5 Commercial banks guarantee service completion time. 3 Responsiveness 3.1 R1 the staff demonstrate a willingness to meet customers’ needs. Fida et al. (2020) and Balinado et al. (2021) 3.2 R2 Quick resolution of any complaints. 3.3 R3 Prompt fulfillment of customer requirements. 3.4 R4 the staff ensure timely service delivery, even during peak hours. 3.5 R5 incorporating customer feedback to enhance our loan services. 4 assurance 4.1 a1 Commercial banks staff consistently respect and maintain the confidentiality of information regarding small and medium-sized enterprises loans. Balinado et al. (2021), etana (2021) and Khan et al. (2021) 4.2 a2 Commercial banks ensure the confidentiality and privacy of our customers’ transactions. 4.3 a3 Commercial banks’ staff possess sufficient professional knowledge and experience to address all customer requests. 4.4 a4 Commercial banks’ staff consistently demonstrate confidence in processing and executing loan transactions for small and medium-sized enterprises. 4.5 a5 all customer concerns and requests were done. 4.6 a6 Commercial banks’ staff allocate customers’ waiting time for service appropriately. 5 empathy 5.1 e1 service staffs apologize when committing mistakes. Balinado et al. (2021) and Khan et al. (2021)5.2 e2 Commercial banks notify customers in advance if there are any changes to the promised the terms of loan services. 5.3 e3 Commercial banks do not discriminate against customers. 5.4 e4 Commercial banks provide the convenient schedule for customers. 5.5 e5 Commercial banks’ staff understand and provide for the special needs of customers. 6Customers satisfaction 6.1 sa1 i am satisfied with the quality of loan services offered to small and medium-sized enterprises. Balinado et al. (2021) 6.2 sa2 i am satisfied with the features provided by loan services to small and medium-sized enterprises. 6.3 sa3 i intend to keep using the bank’s lending services to small and medium-sized enterprises. 7Customer loyalty 7.1 CL1 i consider commercial banks as my first choice for loan services. Markovic et al. (2018) and supriyanto et al. (2021) 7.2 CL2 i am committed to maintaining my relationship with commercial banks. 7.3 CL3 i am loyal to commercial banks. 7.4 CL4 i plan to use the loan services of commercial banks more frequently.