An investigation of interest rate communication strategies on customer decision-making in banking: a case study of Fortis Microfinance Bank
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Background of the Study
Effective communication of interest rate policies is essential for guiding customer decision-making in the banking sector. Fortis Microfinance Bank has recently revamped its communication strategies to ensure that customers are well informed about interest rate changes and their implications for savings and loan products (Adeyemi, 2023). The bank employs a multi-channel approach—using SMS alerts, mobile app notifications, and personalized emails—to disseminate rate information. The theoretical framework for this initiative is based on behavioral finance and communication theories, which assert that transparent and timely information significantly influences consumer behavior. Clear communication reduces uncertainty, fosters trust, and encourages customers to make informed decisions regarding deposits and investments (Chinwe, 2024). Fortis Microfinance Bank’s strategy emphasizes not only the frequency of communication but also the clarity of messaging, ensuring that complex financial information is presented in an accessible manner (Okoro, 2025). Empirical studies have shown that when customers perceive interest rate information as reliable and easy to understand, they are more likely to engage in positive financial behaviors. However, challenges remain in achieving uniform message delivery and addressing varied levels of financial literacy among customers. This study aims to investigate the effectiveness of Fortis Microfinance Bank’s interest rate communication strategies on customer decision-making, identifying key strengths and areas for improvement.
Statement of the Problem
Despite enhanced communication efforts, Fortis Microfinance Bank faces challenges in influencing customer decision-making through its interest rate messaging. Some customers report difficulty understanding the nuances of rate changes, leading to indecision or misinformed financial choices (Olu, 2023). Inconsistencies in message delivery across different communication channels have further compounded the issue, creating a fragmented information landscape. Additionally, rapid market fluctuations sometimes render the communicated information outdated by the time it reaches customers. This misalignment between the intended message and customer perception results in a gap between expected and actual behavioral responses. Furthermore, differences in financial literacy levels among customers mean that standardized messages may not effectively address the needs of all customer segments. These challenges underscore the need to evaluate the effectiveness of current communication strategies and identify methods to tailor messages more precisely to diverse audiences. The study seeks to examine these issues and propose recommendations that can enhance the clarity, timeliness, and overall impact of interest rate communication on customer decision-making (Emeka, 2024).
Objectives of the Study
To evaluate the impact of interest rate communication strategies on customer decision-making at Fortis Microfinance Bank.
To identify challenges in the dissemination and interpretation of interest rate information.
To recommend tailored communication strategies to enhance customer understanding and decision-making.
Research Questions
How do current interest rate communication strategies affect customer decision-making at Fortis Microfinance Bank?
What challenges hinder effective communication of interest rate information?
How can message delivery be optimized to improve customer comprehension?
Research Hypotheses
Clear and timely interest rate communication is positively correlated with informed customer decisions.
Inconsistencies in message delivery negatively impact customer financial behavior.
Tailored communication strategies improve customer understanding and decision-making.
Scope and Limitations of the Study
This study examines Fortis Microfinance Bank’s interest rate communication practices over the past two years. Limitations include potential biases in self-reported customer behavior and the influence of external economic factors.
Definitions of Terms
• Interest Rate Communication Strategies: Methods used to convey information about rate changes to customers.
• Customer Decision-Making: The process by which customers choose financial products based on available information.
• Financial Literacy: The ability of customers to understand and use financial information effectively.
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