During the past decade, the financial sector in Sierra Leone has undergone major changes mainly

through the financial sector structural adjustment programme as part of the economic recovery
programme. Moreover, globalization, mergers and acquisitions, and the emergence of new
technologies have contributed dramatically to stiffer competition and pressures on profitability.
In such a competitive marketplace, attracting profitable customers is a priority of all the financial
institutions’ (FI) managers especially banks. Banks are profit-seeking institutions that must
provide acceptable returns to shareholders (Agyapong, Agyapong & Darfor, 2011).

The banking industry in Sierra Leone has come under intense competition in the past ten years.
This is due partly to new entrants into the industry both local and foreign and enforcement of
Bank of Sierra Leone regulations. High service quality is therefore required to differentiate
offerings in the market place. Good customer service will only be defined by the experience of
the bank customers. The question is what is required to attract, maintain and excite customers in
the banking sector in Sierra Leone. Customers are the heart of every successful business and
therefore businesses need to more concentrate on customers more than ever. Except those who
donate blood voluntarily, one is either selling a service or a product for a living. Politicians,
bankers, clerks, messengers, bus conductors, mortuary attendant, ticket agents, market women
and everyone who provides a trade or service has a customer. According to Scott (2002),
Customer service is a series of activities designed to enhance the level of customer satisfaction,
that is, the feeling that a product or service has met the customer expectation. The level of
satisfaction can also vary depending on other options the customer may have and other products
against which the customer can compare the organization’s products.

Some of the main challenges in customer service in banking includes poor data base
management of customers, illiteracy level of majority of customers, lack of adequate
infrastructure and technology on which customer satisfaction depends on like electricity (for
ATM operations), low level of internet penetration. The importance of technology in banking
became obvious when developed countries that had involved IT in its banking operations
managed to reduce their costs of operations (Daily Graphic, 2008). Banks in Sierra Leone
gradually introduced technology into its operations in the late 1980s to enhance their operations
and to help clients enjoy their services with much convenience. Various researches have
indicated that technology influences banking in a positive way in terms of productivity, cashiers’
work, banking transactions, bank patronage, bank services delivery, customers’ services and
bank services (Balachandher et al., 2001; Idowu et al., 2002; Hunter, 1991; Yasuharu, 2003).
Owusu-Frimpong (1999), other factors that customers are looking for in a high customer service
can be divided into two broad groups as tangible and intangible factors. The tangible factors may
concern performance, quality, reliability, cost of services and convenience. The intangible
factors may be reputation, sense of caring, courtesy, willingness to help, problem solving ability
of staff, etc. The tangible and the intangible factors primarily drive home the point about
customer’s perception about how he/she is being treated by a bank. Is the bank being fair to
him/her in matters of interest rates, penalties, service charges and that he/she has not to fear any
hidden costs and charges at a later date. Further, the customer also draws comfort from the fact
that he or she is not being discriminated against vis-à-vis a new customer. Lack of data
integration in the industry does not encourage industry growth. In fact, customer service is a
challenging issue in any service industry as there are many intangibles that define a customer’s
satisfaction or otherwise with a particular bank / branch / product or process. The advertisement
and marketing campaigns that seem to evoke heightened customer response would come to zero
if the service standards do not match the perceived quality aspirations of the customers. From the
point of view of an overall sales process engineering effort, customer service plays an important
role in an organization’s ability to generate income and revenue (Don & Rogers, 2008). The
benefits of the current customer-centric banking industry are phenomenal. The banks are able to
differentiate themselves from the competition and improve their image in the eyes of the
customer.
1.1.1. Background of the Sierra Leone economy
The Sierra Leone’s economy continues to face significant challenges with high inflation,
pressures on the currency, high risk of debt distress and inadequate growth to support poverty
reduction. Despite some efforts in 2023, further corrective fiscal and monetary measures are
urgently needed to address the high inflationary pressures and the worsened food security
situation. (Padres, 2023).

In 2023, economic growth was estimated to have decelerated for the second consecutive year,
with an estimated rate of 3.1%. This slowdown was primarily attributed to subdued aggregate
demand and socio-political stability concerns. The economy grappled with persistent inflation
which diminished households’ purchasing power and restrained both private consumption and
investment. Despite these challenges, the mining sector emerged as a bright spot, driven by
robust iron ore production and exports, alongside promising agricultural output. (Sarvari, et al.,
2021).

As of 2024, Sierra Leone's economy was characterized by its reliance on agriculture, mining, and
increasingly, the services sector. The country has abundant natural resources, including
diamonds, gold, bauxite, and rutile, which have historically been significant contributors to GDP.
However, the economic benefits from these resources have often been undermined by corruption,
poor infrastructure, and lack of diversification.

Inflationary pressures remained high throughout the year, albeit showing some tentative signs of
easing in the final quarter. Headline inflation averaged 47.6% for the year, making it the second
highest in Africa after Sudan. Factors contributing to this included elevated food and fuel
inflation, currency depreciation, and ongoing fiscal dominance. More than half the population
faced moderate food insecurity, while over 70% of households allocated a substantial portion of
their monthly expenditures to food, further straining social and political stability. In response, the
Central Bank raised rates by a cumulative 525 basis points, reaching 22.25% by the end of 2023.
However, the effectiveness of monetary policy was limited by shallow financial markets and
continued fiscal dominance. Inflation began to show signs of moderation, declining from its peak
of 54.6% in October to 43% by February 2024.
While the fiscal position saw marginal improvement in 2023, it fell short of annual targets. The
fiscal deficit narrowed to nearly 8.4% of GDP, slightly better than 2022 but still higher than the
budgeted target. Expenditures decreased compared to 2022, while domestic revenue saw a slight
increase. Public debt is estimated to have declined to 87% of GDP from 93% in 2022.

Although there was a slight improvement in trade and current account balances, official reserves
decreased to barely three months of import cover due to external debt servicing, currency
interventions, and foreign currency payments to diplomatic missions overseas.

Growth is projected to recover slowly to 3.5% in 2024 against a backdrop of high inflation and
continued fiscal consolidation, before converging to its long-term average of 4-4.5% in the
medium-term. Inflation will be influenced by global commodity prices and monetary tightening
and is expected to moderate to 15% by 2026. Upholding fiscal and monetary policy tightening is
pivotal for macroeconomic stability. (Bringer & Ireland, 2022).