Primary Research

The primary research for the study was conducted in both South Africa and Tanzania. Due to budget constraints, the primary research that could efficiently and effectively be conducted in South Africa was done so. However, primary research was conducted in Tanzania when it was a requirement of meeting the study’s objectives.

5.3.4.1 Primary Research Conducted in Tanzania

The nature of the problem statement required a certain degree of the primary research to be conducted in Tanzania. The Tanzanian population has its own unique culture and characteristics that influence their decisions when deciding whether to open a formal bank account. Data collection was conducted in Tanzania to allow for these unique characteristics and culture to be represented in the study.

Initial qualitative research was conducted in South Africa by means of telephonic interviews with individuals who were experienced in the Tanzanian banking industry and with opinion leaders in fields of commonality between South Africa and Tanzania such as Stokvels and Islamic Banking.

Further qualitative research was conducted in Tanzania by formulating questionnaires based upon the findings of the qualitative research conducted in South Africa. Qualitative research was conducted with both bank manager and banked and unbanked individuals in Tanzania.

During the qualitative phase of the study it became apparent that, as the theory of planned behaviour was developed within a Western context (Ajzen, 1985) and does not take into account the unique characteristics of the Tanzanian population. The findings of the qualitative research were used to adapt the model for the study. The results of the adaptation can be found in section 5.4.

Quantitative research was also conducted in both South Africa and Tanzania. A pilot study of the cross sectional survey design was administered in South Africa due to time and monetary constraints, which did not allow for it to take place in Tanzania.

The pilot study allowed for the testing of the reliability of the scale items selected for the questionnaire (questionnaire discussed in section 5.6.1.2). Quantitative research in the form of a cross sectional survey design took place in Tanzania itself.

5.3.4.2 Exploratory Research

Exploratory research was conducted in the form of qualitative research, which is defined as a form of systematic empirical inquiry into meaning (Shank, 2002). The following forms of qualitative research were used in the study: (1) experience surveys, (2) focus groups and (3) observation.

i. Experience Surveys

The first form of exploratory research conducted was experience surveys.

Experience surveys involve speaking to individuals who have experience in the research problem and field of study (Wiley, 2010). Four stages of experience surveys were conducted: (1) semi-structured telephonic interviews, (2) informal personal interviews within South Africa, (3) semi-structured personal interviews with banking CEOs in Tanzania, and (4) informal personal interviews with banked and unbanked Tanzanian individuals.

ii. Semi-structured Telephonic Interviews

Telephonic interviews were used when conducting interviews with Johan Vermaas and DK Waiza; two high ranking bank officials in Tanzania. Johan Vermaas was formerly employed as retail director of NBC bank in Tanzania, while DK Waiza currently holds the position of Institutional Coverage Manager at Absa Capital for Tanzania.

The interview guide (Appendix A) that was used during the telephonic interview is comprised of six questions, each focusing on a different area of the Tanzania banking industry. The six focus points that were addressed in the questionnaire can be found in Appendix A.

Open-ended questions were chosen for the interviews as they allow for a more detailed response from participants and provided an opportunity for them to include their own knowledge and feelings (Zikmund et al., 2010).

The telephonic interviews identified key concerns and problems faced by both Tanzanian consumers and banks doing business in the country. The following key concerns were identified: (1) a high unbanked population, (2) a lack of consumer trust towards banks, (3) poor customer service, (4) a lack of customer-centric product offerings exists, (5) too many banks are doing business in Tanzania and (6) banks lack information about consumer behaviour.

The findings of the telephonic interview enforce the need for this study. The findings indicate that the high unbanked population in Tanzania is problematic for banks and that they would like to increase their market share. The respondents felt that consumers do not trust banks, which prevents them from opening formal bank accounts. The low level of trust towards banks could be a result of the negative attitudes held by individuals towards banks and the act of banking. According to the respondents little information is available to Tanzanian banks about consumer behaviour, making it difficult to design marketing strategies. It is likely that the lack of consumer behaviour information leads to banks not offering customer-centric products offerings. This study provides banks with consumer behaviour research which will empower banks to develop customer-centric product offerings and in turn likely increase the banked population of Tanzania.

iii. Informal Interviews within South Africa

Face-to-face, informal interviews were conducted with three individuals: Nolundi Bhiko (Stokvel owner), Razeen Nieftagodien (President of the Islamic Society at the University of Stellenbosch) and Chrizelda van Reenen (Absa Sales Manager).

Nolundi Bhiko was interviewed by the researcher as she is the leader of a local Stokvel in the Stellenbosch area. A Stokvel is a type of credit union, or communal buying group, in which a group of people enter into an agreement to contribute a fixed amount of money to a common pool weekly, fortnightly, or monthly, to be drawn in rotation according to the rules of the particular Stokvel (Wits, 2008). When conducting the telephonic interviews with DK Waiza and Johan Vermaas, it was discovered that Tanzania has informal banking systems that are very similar to that of South Africa’s Stokvel system (both are built around culture). The personal

interview with Nolundi Bhiko was used to gain an understanding of these informal banking systems and the role that culture has in their formation and membership.

The findings suggested the following about Stokvel systems: (1) they have a motivational factor as all members save together, (2) they act as loans and are cheaper than taking out credit at a bank or store and (3) Stokvels vary greatly based upon the culture in which they operate.

Thirty-five percent of the Tanzanian population is Muslim and thus the researcher saw it necessary to conduct exploratory research into the Muslim culture and Islamic banking (Africamiracles, 2013). The research into this particular avenue was conducted using face-to-face interviews with the president of the Islamic society at the Stellenbosch University and Chrizelda van Reenen, who is the general sales manager for Absa in Stellenbosch. Three interesting insights were made in these interviews: (1) the majority of banks in Tanzania do not provide an Islamic banking package, (2) Islamic banking is not a priority for most banks as it is not very profitable and (3) only devout Muslims find benefits in switching to Islamic banking as Muslims that are not devout have developed coping mechanisms to overcome the

“sins” of regular banking. Coping mechanisms adopted by Muslims involve: (1) not spending the interest accrued on accounts and (2) purchasing housing and vehicles at a marked up price instead of paying a loan which includes interest.

iv. Semi-structured Personal Interviews with banking CEOs in Tanzania

Semi-structured personal interviews were conducted with banking CEOs in Tanzania from: (1) FNB Tanzania, (2) NBC and (3) CRDB. Interviews were conducted with these individuals to gain insight into how the banks were approaching the large unbanked population in Tanzania as well as what they felt the contributing factors for these numbers were. An open-ended questionnaire was formulated for the interviews (Appendix A). Being exposed to the thoughts and feelings of respondents was still important at this stage of the research as generalised information about the banking industry was still being acquired. The interviews indicated that banks were largely uninformed about the questions asked and most answers were generic in nature. The majority of banks provided the same answers and were able to offer the researcher little insight into the problems faced by the banking industry.

In the informal interviews banks indicated that their main focus was on acquiring corporate clients, as private clients often could not afford banking. Banking managers accredited the large unbanked population in Tanzania as being a result of the high level of poverty in the country. It was apparent that bank managers used the high level of poverty as an excuse not to conduct consumer behaviour research.

Bank managers did however state that many consumers struggled to provide the necessary documents to open a formal bank account. Banks when asked about offering customer-centric product offerings stated that they did not see a need to and that their ‘one size fits all’ savings and cheque accounts were sufficient. As can be seen banks are largely uninformed about the needs of consumers and what leads them to open a formal bank account.

v. Informal Personal Interviews with Banked and Unbanked Tanzanians

Lastly, informal personal interviews were conducted with individuals from both the banked and unbanked population in Tanzania. The interviews were conducted in the form of a conversation, in relaxed environments such as restaurants and bars, chosen specifically to create an opportunity for respondents to feel comfortable to share their opinions (Gupta, 2007). Banked individuals were asked to provide motivation for their decision to open a bank account and why they felt the unbanked population in Tanzania was high. Unbanked individuals were asked to motivate why they had not opened a bank account and what they felt were the benefits of being banked and unbanked. The results of the interviews corresponded with those found in the focus groups.

vi. Focus Groups

Focus groups were conducted in Tanzania with both banked and unbanked individuals. Focus groups provide subjective data about individuals’ attitudes towards a given object or behaviour (McDaniel and Gates, 2009).

The two focus groups were held at the University of Dar es Salaam in classrooms provided by the university. The banked focus group consisted of ten individuals,

while the unbanked group consisted of eight. Individuals selected for the focus groups comprised of students from the Unviersity of Dar es Salaam.

Two individuals were required to moderate the focus groups. One individual (a local Tanzanian student) was present to act as a translator and moderator. The student was able to better understand and relate to the local culture than the researcher, which proved helpful in the focus group. The second individual, the researcher, was present to lead the focus group discussion and ensure that it was recorded.

Recording took place by means of a voice recorder and writing key points. The first moderator was carefully selected as it was necessary to find an individual comfortable with speaking in front of groups of individuals in both English and Kiswahili.

A discussion guide (Appendix B) was created by the moderator as a road map to guide the focus groups (Stewart, Shamdasani & Rook, 2007). The discussion guide prompted the moderator to begin with an introduction to the focus group, welcome respondents and thank them for their time. Respondents were then asked to introduce themselves and a small discussion was held with each respondent to develop rapport. Respondents were then led through the discussion topics on the discussion guide. Lastly, respondents were thanked for their participation and dismissed.

The unbanked focus group provided the following key insights: (1) many individuals worried about the security of their money and did not trust banks, (2) banking service is poor with long queues, (3) they were not aware of the different banking services that existed and (4) many respondents were using M-PESA as an alternative to formal banking. Thus many of the concerns identified in the interviews with Johan Vermaas and DK Waiza such as poor trust towards banks and poor customer service were identified in the unbanked focus group. The low level of trust towards banks appeared to be a result of a lack of education about how banks operated as participants expressed concerns that banks could leave the country taking with them consumers’ money at any time.

The key findings from the banked focus group were: (1) the majority of individuals had opened a bank account because they were forced to do so by their bursar, (2) banked individuals could clearly state the benefits of owning a bank account which were the ability to earn interest, the ability to build a credit history and security of funds, (3) bank accounts are viewed as a luxury item and (4) bank service is poor with long queues and empty ATMS. It was interesting to note that banked individuals who appeared more educated about banking products and service indicated a high degree of trust in banks.

vii. Observation

Observation was conducted in NBC, Barclays, FNB and CRDB in Tanzania. A mystery shopper approach was used when conducting observation. Individuals were studied in both local and international banks.

The observation provided an understanding of how banking transactions are conducted in Tanzania, the level of customer service offered by employees and how comfortable customers appeared to be when transacting at the bank. Human observation was used and no interaction between the observer and the respondents took place. It was important to ensure that respondents were not aware that they were being observed or this might have altered their behaviour (Boote and Mathews, 1999). Nonverbal behaviour was observed more than verbal behaviour due to the language barrier that existed between the respondents and the mystery shopper.

Nonverbal behaviour was deemed to provide a sufficient indication of an individual’s experience with the bank as it has been shown to be a communication process by which meanings are exchanged between individuals.

The observation exercise confirmed many of the findings of the focus groups and informal interviews held with Tanzanians. Government and locally-owned banks were found to have long queues and to be understaffed. The poor customer service in local banks lead many consumers to appear frustrated. ATMs belonging to government and locally-owned banks were often out of money causing individuals to drive long distances to the next ATM to withdraw funds. The banks halls of international banks such as FNB and Barclays had very few clients in them and

branches were often empty (this was likely due to the perception that these banks are more expensive).

Qualitative research revealed variables of importance that were not included in the theory of planned behaviour. The inclusion of these variables resulted in the development of an adapted version of the theory of planned behaviour for the Tanzanian banking market.