The impact of the banking sector development on the financial performance of the communication sector in sierra leone

Table 2: Sectoral Distribution of Gross Loans and Advances
. 
Sector (s) 
% of Loans and 
Advances
Commerce and finance 
30.04 
Construction
21.7 
Business Enterprise 
9.15 
Transport and Storage 
6.51 
Personal Services 
5.72 
Manufacturing 
7.43 
communication
1.69 
Agriculture 
0.38 
Mining and Quarrying 
3.11 
Forestry 
0.89 
Utility Services 
0.59 
Miscellaneous 
12.79 
Total 
100 
Source: Bank of Siera Leone Financial Development Report 2018 

---

21 
The above table clearly indicated that, the banking sector plays an essential 
role in aiding other sectors in their operations and stands as a solid rock in 
economic development as it reaches all sector of the real economy. The 
communication sector received 0.0169 of Le 1,660.26 bn granted in the year 
2018. Even though seems small as compared to the other sectors it represents 
a huge amount in Leones that helps the sector to function well and meets it 
financial obligations over time.
2.5 Banking Sector Impact on the Communication Sector Financial 
Performance in Sierra Leone 
In the past twenty years Banking sector development and communication 
advances coupled with changes in regulations have not only transformed the 
banking sector and that of the communication sector, but have brought the two 
closer together. The Banking sector do now offer communication services and 
also the telecommunication institutions provides banking related financial 
services. Bank
’s in order to provide internet related services like ATMs, POS 
and other online services do employ the use of some communication line and 
extensively uses the telecommunication system to render services in locations 
far from the banks branches. Telecommunication institutions now provides 
some banking services like the credit cards issuing and processing. The sector 
also has succeeded in increasing the competition with the banking sector by 
providing services that were previously dominated by the banking sector, 
including financing, credit card processing and leasing services. In Sierra 
Leone this is slightly different, currently banking and communication 
companies strategically partnered to customize products to meet their 
customers’ needs whereby customer will be able to commence transaction 
seamlessly via their mobile hand-set with full scale protection. 
The role of banks in aiding the operational activities of the communication 
sector by providing concessional advances products to augment their smooth 
operational activities, grant loans and overdraft to finance capital investment 
and other projects, helps the sector on receivables and also offer cash and 
credit management. The convergence of computers and advance 
telecommunication gadgets have been the key factor responsible for the 
bonding between the two sectors.

---

22 
The banking sector in Joint venture loans financed the establishment of a 
whole telecommunication company in the early 2000’s even though the 
company struggled and failed to reach the big stage and eventual shut down, 
but serves as an evidence to the extent of banking sector impact to the 
performance of the communication sector in Sierra Leone. Banks plays 
fundamental role in the development of the general economy and a major 
player to the fast-developing communication sector in the country. All 
communication institution in Sierra Leone relied heavily on banking facilities 
for their sustenance and operational viability. The bank has over the years met 
their expectations and till to date. Evidence of which can be found in the latest 
Bank of Sierra Leone (Leone, 2018) report, which showed that the 
communication sector received .0169 in percentage of the total loans and 
advances granted to the industrial sectors within the economy. The 
Communication sector financial performance has over the year improved 
immensely due to the support from the banking sector and with the recent 
strategic partnership both are bound to a win-win relationship in the 
foreseeable future.