THE EFFECT OF INTEREST BANK AND PRODUCT QUALITY ON LOAN CUSTOMER LOYALTY, WHICH WAS MEDIATED BY CUSTOMER SATISFACTION AT BPR JATIM (PERSERODA), A BRANCH OF GRESIK

Abstract

This study determines and analyzes the effect of interest and product quality on customer loyalty, which was mediated by customer satisfaction at BPR Jatim (Perseroda), a branch of Gresik.  The study applies quantitatively. Furthermore, the population consists of customers who take credit at BPR Jatim (Perseroda), a branch of Gresik. The data collection technique used was purposive sampling with 237 respondents as samples. Moreover, the instrument in the data collection technique was a questionnaire. The questionnaires had been tested for their validity and reliability. The data analysis technique used was Partial Least Squares (PLS). As a result, it shows that as follows: (1) interest has a positive but insignificant effect on customer satisfaction, (2) product quality has a positive and significant effect on customer satisfaction, (3) interest has a positive and significant effect on customer loyalty, (4) product quality has an insignificant effect on customer loyalty, (5) customer satisfaction has an insignificant effect on customer loyalty, (6) customer satisfaction cannot mediate significantly the interest on customer loyalty, and (7) customer satisfaction cannot mediate significantly the product quality on customer loyalty.