Effect of Customer Trust on Customer Loyalty: Case of Second-Tier Microfinance Institutions in Cameroon

International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue VI, June 2020 | ISSN 2454–6186

Effect of Customer Trust on Customer Loyalty: Case of Second-Tier Microfinance Institutions in Cameroon

Laure FANGUE¹, Colette SIMO^2*, Jean DOUANLA^3
1,3Faculty of Economics and Management, University of Dschang, Cameroon
²The Dschang School of Economics and Management, University of Dschang, Cameroon
*Corresponding author

Abstract: The aim of this study is to investigate the effect of interpersonal trust on customer loyalty of second-tier microfinance institutions in Cameroon. The study population consists of customer of second-tier microfinance institution. For this purpose, a survey questionnaire was carried out on 372 customers in total. The acquired survey data was evaluated via confirmatory factor analyses, reliability analyses and structural equation. The results show that interpersonal trust affect is positively correlated to the four dimensions of customer loyalty positively.

Keywords: Customer trust, customer loyalty, SEM

I. INTRODUCTION

The long-term perspective in which service organizations have been immersed since the advent of relationship marketing requires them to be rigorous in choosing the means to achieve their objectives. Customer loyalty is part of this and has the advantage of reducing advertising expenses through word of mouth, which flattered customers demonstrate. If they are satisfied, they become brand ambassadors to third parties. In fact, 83% of consumers believe the recommendations of their friends and family (Nielsen, 2015). Therefore, an organization’s success lies in its ability to keep customers satisfied (Peppers and Rogers, 2005). The success of an organization’s customer loyalty is proof of the effectiveness of the management policy adopted by the organization. Customer loyalty requires customer satisfaction, commitment and trust, concepts that have been widely endorsed as the antecedents of loyalty (Evrard et al., 2003). However, the continuous evolution of the service sector with an increasingly diverse range of services makes customer satisfaction even more complex. In addition, there are competitors, each more thirsty than the last for its commitment to them. In the face of these pitfalls, the organization’s escape route to make a lasting impression on customers’ minds is through service meetings. Indeed, the customers’ experience can contribute to the success of enterprises.

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