The influence of corporate social responsibility on customer loyalty in banking sector: the case of selected commercial banks in Tanzania

The study examined the influence of Corporate Social Responsibility on Customer Loyalty using evidence from commercial banks in Tanzania. The study was guided by four objectives namely economic, legal, discretionary (philanthropic) and ethical responsibility as they influence customer loyalty. The study was informed by Consumer Behavior Theory, stakeholder theory and Carroll models. This explanatory based study involved a sample size of conveniently selected 120 employees from NMB, CRDB and Citibank. In addition, 3 key informants from respective banks were contacted for in depth information to complement quantitative data obtained from the selected sample of the respondents. The obtained data were analyzed using inferential statistics where multiple regression analysis was used. The study found out the three independent variables namely Economic, Ethical and Legal responsibilities had statistical significant influence on customer loyalty. The other independent variable namely philanthropic responsibility had positive, but insignificant influence on the customer loyalty. The study recommends that, banks should create utmost use of allocated resources to dedicate them to CSR activities especially economic, ethical and legal activities. Also it's recommended that communication about investment on CSR activities, and tangible positive results should be made to clients and the general public, which will help them better recognize the contributions the bank is making and subsequently enhance customer loyalty. The study findings have policy implications on a need for the government to emphasize on banks commitment to CSR engagement for the good citizenship, but also an opportunity for enhanced customer loyalty.