Challenges Hindering the Adoption of Pricing Policies of Financial Products and Services in the Banking Sector of Yemen

Murad Thomran,Ali Saleh Alshebami

The paper aims to identify the challenges and difficulties facing the Yemeni Banks when pricing their financial products and services extended to clients. It investigates the challenges exist in the internal environment (Internal Factors) and the ones in the external environment (External Factors). The methodology of the study included distributing a questionnaire to 250 employees working in 11 banks operating in the study area of Yemen in addition to the secondary data that was collected from a few previous studies. The data was then tabulated and analyzed with the help of the Statistical Software Package (SPSS). The findings of the study confirmed that, there are number of internal and external factors that hinder the easiness of the pricing process of banking services. The external factors included the economic condition of the state, the fluctuation of exchange rate, the nonexistence of the stock market, and finally the competitor's price. The internal factors on the other hands were attributed to the unavailability of experts in pricing banking services and the absence of banks specialized unit in charge of handling the pricing customers. The study also disclosed that most of the banks do not have a separate unit in charge of market and research development studies. A few recommendations of the study emphasized on the need to appoint expert individuals in banks to handle the financial services pricing unit in addition to keeping, the pricing methodologies updated. Moreover, this would be done only by establishing a special unit for research and development. The study also recommended that, there is a need for urgent cooperation between the government and the private sector, as they both need to work together on the establishment of a stock market as soon as possible. The government on its side needs to start working on the required financial and physical infrastructure necessary for this step.

Volume 11 | 02-Special Issue

Pages: 682-688