Qudratullah Rahmat

Abstract

The objective of this study is to ascertain the factors that determine the choice of bank among retail and corporate customers in Balkh province, Afghanistan. In this study, 603 customers were interviewed in the branches of ten commercial banks in Mazar-e-Sharif. Using factor analysis, the study found that the safety of funds, number of branches, reputation of the bank and service charges are the most important factors used to choose a bank by retail customers. The least important factors are the interest rate on deposits and the appearance of the premises. The potential reason that the deposit interest rate is not a significant factor for bank choice is that interest is considered usury and is religiously unlawful. For corporate customers, after the safety of funds, the most important factors are the correspondent banking relationship and the interest rate on loans. The appearance of the premises and the ownership of the bank are the least important factors for corporate customers.

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