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CUSTOMER`S SATISFACTION ON SERVICES PROVIDED BY

MANOHOR SAVING AND CREDIT CO-OPERATIVE

WALLING-6 ,SYANGJA

Submitted By:

Sandhya Aryal

BBA, 6th semester

School of Business, FMS, PU

A Summer Project Research Proposal submitted to:

Project work Committee

School of Business

Faculty of Management Studies, Pokhara University

Dhungepatan, Lekhnath

Pokhara- Lekhnath

4th September, 2017

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CHAPTER I

INTRODUCTION

1.1 Background of the study

Consumer or customer is the most important person in any organization. A consumer


is not dependent on the business but the business is dependent on the consumer or
customer. In that sense a consumer or customer satisfaction is one of the most
important aspect in the organization development. Consumer satisfaction is the
supreme aim in the modern business world. Success and failure of the whole
organization depends on the level of the consumer satisfaction .If the customers are
treated well or if their needs are met they become well satisfied towards the
organization and if not they are not satisfied and this becomes the base for the
upliftment or downfall of the organization as a whole.

A co-operative is an autonomous body of people united voluntarily to meet their


common economic, social and cultural needs and aspiration by jointly working for
betterment and development of each member. This organization works with the main
motto of “one for all and all for one”.

A cooperative is a non profit motive community organization and businesses that are
owned and managed by the people who use their services, get involved in there, live
there or bet some benefit from there. So cooperative can be defined as a joint
ownership of people engaging in the production or distribution of goods or the
supplying of services, operated by its members for their mutual benefit. It is typically
organized by consumers and farmers and are more economic resilient than many other
enterprise. Co-operatives are based on the values of self-help, self-
responsibility, democracy, equality, equity and solidarity. In the tradition of their
founders, co-operative members believe in the ethical values of honesty, openness,
social responsibility and caring for others.

A saving and credit cooperative is financial cooperative democratically controlled by


its members and operated for the purpose of promoting thrift , providing credit at
competitive rates and providing other financial services to its members .in Nepal the
development of cooperative seems to have a long and detailed history.

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Nepal has a long cultural tradition of informal community based co-operatives
including savings and credit associations popularly known as dhikuti, and grain
savings and labour savings systems known as parma and dharma bhakari. Similarly,
Guthi provided a forum to work together for smoothly running different socio cultural
practices. Many of these traditional systems of cooperation are still functioning in the
rural areas of Nepal.

The first Co-operative Act was enacted by the government in 1960, which was
followed by the Agricultural Co-operative Act (Sajha Sahakari). In 1963, the capital
of savings and credit cooperative societies was converted into a Cooperative Bank in
1963, and in 1968 it was also converted into the Agricultural Development Bank of
Nepal (ADBN). After 5 years the ADBN returned management back to the
government and in 1975 the Cooperative Act was amended again.

Beginning in the 1980s a new generation of community based savings and credit
groups began to emerge in Nepal. The Cooperative Act was amended for the third
time to give the Government more control. By this time the Savings and Credit
movement had spread throughout the country and the need for an apex coordinating
body was evident. In August 16, 1988, the Nepal Federation of Savings and Credit
Cooperative Unions (NEFSCUN) was formed.

After the restoration of the democratic government enacted the Co-operative Act and
the Co-operative Regulations. The new Cooperative Act permitted the establishment
of a three tiered co-operative system, and provides a legal base both for the
establishment of co-operative societies/unions/federations and application of co-
operative values, norms and principles into practice. At present, the Department of
Co-operatives is working under the Ministry of Agriculture and Co-operatives.

Today, the Interim Constitution of Nepal has considered the co-operative sector as
one of the three pillars for national development. The major types of co-operative
societies operating in Nepal are Saving and Credit, Multipurpose, Dairy, Agriculture,
Fruits and Vegetables, Bee Keeping, Tea, Coffee, Consumers, Science and
Technology, and Energy. It is believed that some 5 million people are already
affiliated in approximately 32,663 cooperatives and more than 57,894 people are
employed directly in Cooperative business.(2015, Department of Cooperatives).

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1.1.1 Introduction of Organization

Manohar Cooperative Ltd is located in walling-6 Mirdi , which was established in


2068 BS. This cooperative is established with 33 shareholders. It's registration
number is 292. Currently there are 115 members out of which 71 are male and 44 are
females. As we know that A savings and credit cooperative is a cooperative financial
organization owned and operated by and for its members, according to democratic
principles, for the purpose of encouraging savings, using pooled funds to extend loans
to members at reasonable rates of interest and providing retailed financial services to
enable members improve their economic and social well-being. This saving and credit
org also encourage saving and provide loan at reasonable interest This Saving and
Credit Cooperative also mainly focuses to encourage for saving and provides help to
promote the business of its members and provide loan at reasonable interest.

1.2 Research Problem

1.2.1 Problem definition

As stated earlier, the number of cooperative in Nepal is increasing. They are not
expanding only in their number but also in activities and services. On the other hand
due to limitation by provisions, laws rules and services often the customer feels
neglected or indifferent by the organization. Though some of the customers are
satisfied and well treated most are often below the unsatisfactory level. Customers
being the life blood of any organization every individual organization try to satisfy
and fulfill the need and want of the customer to help them be satisfied and content.
.under the prevalence of this situation, the major problem identified regarding the
cooperative (saving and credit cooperative) are:

1. What is the level of customer satisfaction in this cooperatives?

2. What are the factors that lead to customer satisfaction?

3. What are the ways of improving customer satisfaction in this cooperative


organization?

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1.2.2 Research Question

 Is there any relation between customer satisfaction and appearance of the


employee in the organization?

 Is there any relation between customer satisfaction and interest rate defined by
the organization?

 Is there any relation between customer satisfaction and location of the


organization?

 Is there any relation between customer satisfaction and behavior of the


employees in the organization?

 What are the ways or steps taken by the organization to satisfy the consumer?

 What is the timeframe in payment of the loan?

1.2.3 Research Gap

Although many researchers have studied customer's satisfaction in saving and credit
co-operative organization but none of the research has conducted on this topic in this
area/place. So this is the research gap of my topic. This research particularly focus on
ways of satisfying the customers. Therefore the outcome of this study will help to
minimize the gap in literature review by providing valuable insight regarding the
customers satisfaction on services provided by Manohar saving and credit co-
operative.

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1.3 Objectives of study

This study aims to assess the cooperatives performance in terms of customer


satisfaction. However, the functional objectives of the study are:

 To find out the comparative level of satisfaction and dissatisfaction of


customers in the saving and credit cooperatives.

 To investigate the level of satisfaction in the cooperative sector form location


of the organization.

 To investigate the interest rate in the cooperative and its impact in customer in
satisfaction

 To suggest ways to improve the level of satisfaction among the customers

 To investigate the impact of timeframe in customer satisfaction.

1.4 Significance of Study

A saving and credit cooperative is financial cooperative democratically controlled by


its members and operated for the purpose of promoting thrift , providing credit at
competitive rates and providing other financial services to its members. The study of
determinants of customer satisfaction of the services rendered by Manohar saving and
credit co-operative Ltd was proposed with the purpose of identifying the areas where
the co-operative banks has not done enough in order to meet the community
expectations. The study provide empirical evidence as regards to factors that leads to
customer dissatisfaction with banking services as well as possible strategies that can
be adopted to address this problem. All these findings pave the way on re-setting the
policies and plans of the co-operative banks in order to keep pace with the growing
competitive environment so as to meet the community satisfaction. Similarly this
study helps current researcher in this field, scholars, prospective members, investors
and all of the people who are interested in analyzing the banking performance of
certain co-operative institution. Similarly, other researcher can also use the findings as
reference for the similar studies.

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1.5 Research Schedule

S.N Works /Week 1st 2nd 3rd 4th 5th 6th


1. Proposal Submission

2. Questionnaire Development
3. Data Collection And Field
Survey
4. Data Entry and Analysis
5. Report Writing
6. Submission of final draft

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CHAPTER II

LITERATURE REVIEW AND THEORETICAL FRAMEWORK

2.1 Review of literature

Ravi C. S and Kundan Basavaraj(2013) investigated the preference and satisfaction


level of customer towards loans , deposit schemes, insurance and value added services
rendered by private and public banks in shivamogga district . Business and vehicle
loans are fast moving than other services and overall satisfaction resulted at 50%.
Further, overall satisfaction on bank deposit schemes resulted positively well other
service of banking still need to be given attention by focusing on customer issues.
New innovative schemes, strategies to cater to non users other services have to be
adopted

The Co-operative Bank knows that success in the corporate banking sector isn’t a
mass marketing exercise as it may be in retail banking; it’s down to the quality of
its relationships with customers. The front cover of its company brochure does
highlight the phrase ‘good with money’, but your eye is drawn by the strap line
‘As One – Success built on relationships’. According to Keith Alderson-
Managing Director of Corporate and Business Banking, “We treat our customers
as individuals – we really get to know them and their businesses. Our success
comes from a clear commitment to genuine, long lasting relationships.” To
deliver on its ‘relationships’ promise, one of the ways the bank invests in service
and customer relationship, is by giving its relationship managers a smaller client
base and additional support staff to improve their availability and the customer
experience.

The co-operative society puts much of its success in recent years down to it’s
fanatical focus on customer service. The bank knows from its customer
satisfaction survey data that more satisfied customer are more likely to use more
of the banks products and are more likely to recommend- in fact 51% have
recommended the bank in the last year. In recent years the cooperative’s revenue
and profit have grown along with customer satisfaction. There have also been
other business successes. For example the bank maintained a strong and stable

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capital position and at a time when many of its competitors have firmly closed the
door to companies wanting borrows. Over the last three years , its network has
doubled and it has won numerous new customers who were dissatisfied with their
previous banks.

An exploratory study on measuring service quality and satisfaction has revealed that
perceived quality has a direct and positive impact on overall customer satisfaction. It
has also been made clear that the number and nature of underlying service quality
determinants are contingent both upon country- and business specific considerations.
In this context, and in order to identify the major determinants affecting customer
satisfaction deriving from service delivery in a large cooperative bank in Greece, the
present study attempts to develop a customized scale to measure service quality.
Accordingly, based on relevant research findings and the views of both the customers
and executives of the researched bank, a preliminary 38-item scale was developed and
the corpus of data was collected from a sample comprised of this large cooperative
bank’s customers in Crete, Greece. The combination of exploratory and confirmatory
factor analysis, following a scale purification process, which resulted in a reduced 21-
item scale, has yielded seven determinants: Communication for Building up Trust,
Personnel Relationship, Quality-Price Relationship, Understanding and Consulting,
Bank Set of Values, Serviceability, and Educational Support. The results of regression
analysis indicated that customer satisfaction with the cooperative bank is mostly
affected by: Bank Set of Values, Quality-Price relationship, Understanding and
Consulting, and Communication for Building up Trust.

Service quality, the effective delivery of which has sometimes been disputed ((Voss,
2004)commonly has been viewed as an elusive and complicated construct. In terms of
(croft, 1991)), high quality service is generally defined as a constant process of
predicting and satisfying customers’ requirements and expectations. Oaklands in
addition, states that banking quality service implies the degree to which a specific
type of service meets customers’ expectations. Satisfaction is sometimes defined as an
end-state resulting from a consumer’s purchasing experience, which can either
emerge as a cognitive reward or an emotional response to an experience. Customer
satisfaction has been investigated as a ‘perceptual, evaluative and psychological
process’ taking place during service delivery .It may derive from any dimension
relevant or irrelevant to quality, and judgments may be formed by no quality

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components; it also requires experience for its delivery Scholars have identified
customer- and situational-specific determinants that affect overall satisfaction. In
relation to high -quality confidence - related services such as those provided in the
context of banking, functional quality is emphasized as the most vital driver for
customer satisfaction .Service quality and overall satisfaction have been found to be
closely. Although numerous empirical works have concentrated on the causal order of
the constructs at issue, there is little consensus as to whether expectations for the
delivery of a specific service directly affect satisfaction or whether perceived quality
is the main antecedent of satisfaction. Bahia et al. (2000) suggest that in case of
multidimensional, regularly-performed and high-contact services, such as those
delivered in banking settings, service quality is most likely to affect satisfaction.
Similarly, Papasolomou (2002) advocates that service quality in the banking sector,
viewed as a multivariate construct encompassing dimensions, such as convenience,
reliability, service portfolio and service personnel, has had a substantial impact on
customer satisfaction. Overall, researchers have emphasized that perceived quality,
assumed as an antecedent of customer satisfaction, has a direct and positive impact on
overall satisfaction.

S.Sivesan (2012) found the impact of the service quality on customer's satisfaction in
banking sectors. Service qualities are interrelated with customer satisfaction. Manager
of the bank or administrative body needs to identify the primary quality determinants,
clearly, managing the customer expectation, educating the knowledge to customer
regarding the service for improving the service quality of banking in the sector.

DR. snehalkumar H|mistry (2013) focused on the factors that are affecting customer
satisfaction in banks and analyze their effects. It is revealed that customer satisfaction
is the key for many banks and cooperatives to survive competition. Customer gives
third preference to assurance factors, it include criteria like safety of transaction
consisting in service etc. so , banks and cooperative weather they are private sector of
public sector they should give more focus on increasing reliability, responsiveness
and assurance. For that they can give training to their employee who will help them to
give personalize service.

Many countries of the world accept cooperatives as the important pillar for the
economic and social development of the country. Self-sustenance, self-motivation,

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well management, equality in distribution, consumption and participation are the basic
pillars of cooperatives. Nepal has also improved some of its human development
indicators: infant and child mortality rate decreased, albeit with large regional
variations. Child malnutrition and maternal morality remain high and the prospects of
achieving this Millennium Development Goal are unclear. Nepal's achievements are
impressive given the country's politically difficult and conflict-ridden environment. A
number of structural economic factors explain Nepal’s unexpectedly strong
development outcomes.

A cooperative is not a new concept for Nepal. In ancient age when Aryan sang their
Hymns in praise of natural gods, we find references about credit and lending business
in those hymns. The Vedas- Rig Veda and Athrab Veda in particular abound in
numerous and specific reference about credit and mutual cooperation in economic
fields.

A cooperative is defined by the International Co-operative Alliance's Statement on the


Co-operative Identity as an autonomous association of persons united voluntarily to
meet their common economic, social, and cultural needs and aspirations through a
jointly owned and democratically-controlled.

A cooperative may also be defined as a business owned and controlled equally by the
people who use its services or who work at it. Cooperative enterprises are the focus of
study in the field of Cooperative economics. It is an established fact that cooperatives
are the only institution that can provide both the economic machinery and the social
values required by our age, if their is any hope for the struggling masses of the
emerging countries, like Nepal, it is through mutuality, through working together and
through cooperation.

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2.2 Conceptual Framework

There are various studies done to determine the level of customer satisfaction and
factors affecting them. On the basis of these information and studies we can know that
there number of dependent and independent variable involved in the determination of
customers satisfaction. However of these various independent and dependent
variables we take in consideration only few or major ones due to lack of time and
resources to analyze each and every one of them. Here, research will be conducted on
the periphery of saving and credit cooperative.

Independent Dependent
Variable Variable

Interest rate

Saving options

Location Customer satisfaction

Employee behavior

Loan term

Fig: Conceptual Framework

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CHAPTER III

RESEARCH METHODOLOGY

A study without a proper methodology used cannot be called a wild goose chase.
Every study needs a good and proper methodology, to carry out study works smoothly
and to visualize all to works clearly. Research method is an important for the all type
of research. A sketch of method, used in this study is described in this chapter.

3.1 Research Design

Cooper and Schildler (2003) defined research design as the blue print or plan for
fulfilling the objectives and answering research questions. This study adopted a
descriptive approach. According to Schindler and Coopers (2003), descriptive studies
are more formalized and typically structured with clearly stated hypotheses or
investigative questions.

The major motive of this research is to find out the customers satisfaction on service
provided by Manohar saving and credit cooperative org. For this particular research
various secondary data and information has been gathered via different internationally
credited journals, articles and newsletters. Primary data has been collected with the
help of questionnaire that was designed specifically for this research.

3.2 Population

In this study the target population refers to group of individuals, items from which as
sample taken for measurement. The population of this study includes the customers of
Manohar saving credit co-operative organization.

3.3 Sample Design

The target population will be the customer of Manohar saving and credit cooperative
org in syangja. Since the population is very large it is not possible to incorporate each
and every user in this research. Hence, for this research sample size has been
determined using random sampling method. And the sample size will be 60-100

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3.4 Data Collection

A well-structured questionnaire will be prepared for the purpose of data collection.


The questionnaire will designed in such a way that it assist in meeting the objectives
of the study. Almost all the question were focused on providing information regarding
the customers satisfaction on services provided by Manohar saving and credit
cooperative.

3.4.1 Source of Data

Primary and secondary data will be used in the research for producing reliability
result. The primary data will be taken by structured questionnaire which will be filled
up by 60-100 respondents. The secondary data will be collected from the articles,
journals, reports, internet survey.

3.6 Data Analysis Tools And Presentation of Data

A data analysis tool is another important tool for the structured research so in this
research quantitative data will be surveyed. Then after collection of data,data will be
analyzed through SPSS, Microsoft Excel. Analysis tools are Mean, Median,
Frequency, Standard Deviation will be done on collected data. Tables, charts, graphs
will be used to present the data.

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REFERENCES

1. http://nefscun.org.np/about-us/cooperatives-in-nepal/
2. http://scholarsarchive.byu.edu/cgi/viewcontent.cgi?article=1033&c
ontext=esr
3. “Service Quality And Customer Satisfaction: A Case Study - Banking Sectors
In Jaffna District,Sri Lanka” International Journal of Marketing, Financial
Services & Management (S. Sivesan, 2012).
4. Anderson, E. W. and Fornell, C. (2001). The Customer Satisfaction Index as a
leading indicator, in Handbook of Services Marketing and Management,
Thousand Oaks: Sage
5. Anderson, W. E. ((1994),). “A customer satisfactionn research prospectus.

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