The below presented table represent the summary of the bi-variable correlation between the two variables at a time. Only, those hypotheses are accepted whose p- value is greater than the 0.05. The acceptance of the hypothesis represents the significance of the independent variable on the independent variable vice versa.
Table 4.12 Summary of Hypothesis Testing by using Bi-variable correlation statistical method
Hypotheses Variables Parameters Loan Decision Conclusion (HOi) Remarks (significance level) H01 Satisfaction Pearson Correlation 0.135 Rejected 5% Sig. (2-tailed) 0.046 N 219 H02 Service Quality Pearson Correlation 0.136 Rejected 5% Sig. (2-tailed) 0.045 N 219 H03 Product Availability Pearson Correlation 0.246 Rejected 1% Sig. (2-tailed) 0.000 N 219 H04 Loan Covenants Pearson Correlation 0.201 Rejected 1% Sig. (2-tailed) 0.003 N 219 H05 Installment Pearson Correlation 0.142 Rejected 5%
Sig. (2-tailed) 0.036 N 219 H06 Insurance/ Guarantee Pearson Correlation 0.052 Accepted No significant Sig. (2-tailed) 0.447 N 219 H07 Interest Rate Pearson Correlation 0.062 Rejected 5% Sig. (2-tailed) 0.017 N 219
4.7.1 Satisfaction of the customers and the loan taking decision
Hypothesis (Ho1): There is no significant relationship between satisfaction of the customer and
the loan decision of the customers.
Hypothesis 1 is about discovering the relationship between the satisfaction of customer from banks and financial institutions and their decision regarding the loan from banks and financial institutions.
Table 4.12 shows the correlation analysis between customers' satisfaction and the loan taking decision of the customers. Since the p-value is less than alpha, i.e. 0.046<0.05, the correlation is significant between the variable at 5% level of significance. From this analysis, it can be understood that the customers' satisfaction is important for loan taking decision of the customers. Further with the correlation value of 0.135, it can be said that there exist positive relations between customers' satisfaction from the banking and financial institutions and loan taking decision of the customers. Thus, hypothesis H01 is rejected at 0.05 level of significance.
4.7.2 Service Quality provided by the financial institutions and loan taking decision
Hypothesis (Ho2): There is no significant relationship between service quality and the loan
decision of the customers.
Hypothesis 2 is about discovering whether the relationship, correlation exists between the service quality provided by the banks and financial institutions and their decision regarding taking out the loan from banks and financial institutions.
Table 4.12 shows the correlation analysis between service quality and the loan taking decision of the customers. Since the p-value is greater than alpha, i.e. 0.045<0.05, the correlation is significant between the variable at 5% level of significance. From this analysis it can be understood that the quality of service provided by the banks and financial institutions is important for loan taking decision of the customers. Further with the correlation value of 0.136, it can be said that there are positive relations between quality of service and loan taking decision of the respondents. Thus, hypothesis H02 is rejected at 0.05 level of significance.
4.7.3 Product availability and loan decision
Hypothesis (Ho3): There is no significant relationship between product availability and the loan
decision of the customers.
Hypothesis 3 is about discovering whether the relationship, correlation exists between the product availability on the loan and customers' decision regarding taking out loan from banks and financial institutions.
Table 4.12 shows the correlation analysis between product availability and the loan taking decision of the customers. Since the p-value is less than alpha, i.e. 0.000<0.05, the correlation is significant between the variable at 5% level of significance. From this analysis, it can be understood that the product availability is important for loan taking decision of the customers. Further with the correlation value of 0.246, it can be said that there is positive relation between product availability and loan taking decision of the respondents. Thus, hypothesis H03 is rejected at 0.05 level of
significance.
4.7.4 Loan covenants and loan decision
Hypothesis (Ho4): There is no significant relationship between loan covenants and the loan
decision of the customers.
Hypothesis 4 is about discovering whether the relationship, correlation exists between the loan covenants and customers' decision regarding taking out loan from banks and financial institutions. Table 4.12 shows the correlation analysis between loan covenants and the loan taking decision of the customers. Since the p-value is less than alpha, i.e. 0.003<0.05, the correlation is significant between the variables at 5% level of significance. From this analysis, it can be understood that the loan covenants are important for the loan taking decision of the customers. Further with the
and loan taking decision of the customers. Thus, hypothesis H04 is rejected at 0.05 level of
significance.
4.7.5 Installment structure of the loan and loan decision.
Hypothesis (Ho5): There is no significant relationship between installment structure of the loan
and the loan taking decision of the customers.
Hypothesis 5 is about discovering whether the relationship, correlation exists between the satisfaction of customer from banks and financial institutions and their decision regarding taking out loan from banks and financial institutions.
Table 4.12 shows the correlation analysis between the loan installment structure and the loan taking decision of the customers. Since the p-value is smaller than alpha, i.e. 0.036<0.05, the correlation is significant between the variables at 5% level of significance. From this analysis, it can be understood that the installment structure of the loan is important for loan taking decision of the customers. Further with the correlation value of 0.142, it can be said that there is positive relation between the loan installment structure and loan taking decision of the customers. Thus, hypothesis H05 is rejected at 0.05 level of significance.
4.7.6 Insurance/guarantee requirements and loan taking decision
Hypothesis (Ho6): There is no significant relationship between insurance/guarantee requirement
on the loan and the loan decision of the customers.
Hypothesis 6 is about discovering whether the relationship, correlation exists between the insurance/guarantee requirement on the loan and customers' decision regarding taking out loan Table 4.12 shows the correlation analysis between insurance/guarantee requirement and the loan taking decision of the respondents. Since the p-value is greater than alpha, i.e. 0.447>0.05, the correlation is not significant between the variables. From this analysis, it can be understood that the insurance/guarantee requirement on the loan is not important for loan taking decision of the customers. Further with the correlation value of 0.052, it can be said that there is positive relation between insurance/guarantee requirement and loan taking decision of the customers. Thus, hypothesis H06 is accepted at 0.05 level of significance.
4.7.7 Interest rate of loan and loan decision
Hypothesis (Ho7): There is no significant relationship between interest rate on the loan and the
loan decision of the customers.
Hypothesis 5 is about discovering whether the relationship, correlation exists between the interest rate on the loan and customers' decision regarding taking out loan from banks and financial institutions.
Table 4.12 shows the correlation analysis between interest rate and the loan taking decision of the customers. Since the p-value is less than alpha, i.e. 0.017<0.05, the correlation is significant between the variables at 5% level of significance. From this analysis it can be understood that the interest rate on the loan is important for loan taking decision of the customers. Further with the correlation value of 0.062, it can be said that there is positive relation between favorable interest rate and loan taking decision of the respondents. Thus, hypothesis H07 is rejected at 0.05 level of
significance.
Conclusively, from the table 4.12 we can see the hypothesis 1, hypothesis 2, hypothesis 3, hypothesis 4, hypothesis 5 and hypothesis 7 are rejected showing that there exists significant relation between the independent variables (satisfaction, service quality, Product availability, loan covenants, loan installment and interest rates) and loan decision of the customers. But there is not significant relationship between insurance/guarantee requirement and loan decision of the customers.
4.8. Qualitative analysis of the factors affecting the loan decision of customers from the Banks’