How Far Members’ Satisfaction Mediated Members’ Loyalty? Investigating Credit Cooperative in Sarawak Borneo

Service quality is a global judgment or attitude relating to the superiority of the service, whereas satisfaction is related to a specific transaction. Customer satisfaction has frequently been suggested to be the leading determinant of loyalty. In fact, various scholars proved that there is a significant positive relationship between customer satisfaction and customer loyalty/retention. Service quality is the main thrust of success in business environment as to remain competitive in all businesses even in cooperative business. Thus, this study examines the relationship between service quality dimension, members’ satisfaction and loyalty in credit cooperative. The empirical basis for the study stems from self-administered questionnaires that are distributed to 367 credit cooperative members in Sarawak. A mediation test was conducted to assess whether the members’ satisfaction variable acts as a mediator between service quality and loyalty. The findings indicate that there is a positive relationship between service quality, members’ satisfaction and loyalty. Cooperative members’ satisfaction acted as a partial mediation which means there is a partially effect to the service quality mediated by members’ satisfaction while another part was directly mediated by other variables that has not been thoroughly investigated in this study. This study has important implications for policy makers, government and stakeholders of cooperatives for devising appropriate interventions that could enhance the commitment, satisfaction and loyalty of members in credit cooperatives.