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

4.10.5 Test for Normality of the Residuals 
The test for Residuals normality is done by this study using the Jarque-Bera 
test for normality. The test for normality is of great importance as non-normality 
may cause challenges in case of statistical inference of the estimated 

---

62 
coefficient such as confi
dence interval and significance test that’s heavily relies 
on the normality notion (Brooks, 2014). The general null and alternative 
hypothesis are as follows: 
H0: Normality in the residuals
H1: Non-normality in the residuals 
 
 
 

---

63 
 
 
 
 
 
CHAPTER FIVE
RESULTS 
5.1 Introduction 
Methodology of this study is contained on the previous chapter. However, this 
chapter gears towards the interpretation of the data generated and can be 
further analyzed by the prescribed methods. It will start to provide results with 
the descriptive statistics, test for stationarity, multicollinearity to cointegration 
test, other diagnostic tests thereafter, and the processing and estimation of 
data collected using the ARDL model. 
5.2 Descriptive Statistics 
Table 4: Descriptive Statistics
ROA 
LOAN_VOLUME INT_RATE 
DEBT 
Mean 
0.260250 
0.213600 
0.173900 
0.429500 
Median 
0.258500 
0.214500 
0.176000 
0.449500 
Maximum 
0.362000 
0.295000 
0.226000 
0.534000 
Minimum 
0.177000 
0.151000 
0.125000 
0.245000 
Std. Dev. 
0.060021 
0.040010 
0.024602 
0.079286 
Source: EViews 9 computation of research Data. 
The above table shows that, ROA is determined by Net Income divided by 
Total Asset, which portrays an average value of 26 percent. This reveals that 
the sample institutions on average earned a Net Income of 26% percent of the 
total asset. In as much as ROA indicates the company management capability 
to generate Income from available resources, the higher ROA demonstrates 
that the institutions are more effective in utilizing their assets. 

---

64 
ROA showed 36% while minimum value is 17%. meaning, among the selected 
institutions the most profitable institution earned 36% of net income per every 
SLL 1 invested on total asset. On the contrary, the least profitable institution 
generated 17%. ROA is fairly symmetrical in skewness as it ranges between -
0.5 to 0.5. 
Loans and Advances volume which is determined by the total value of loans 
and advances over total assets. Showed an average value of 21% with 
maximum of 29% and 15% minimum indicating that the selected institutions in 
average operated their activities with bank facility to the tune of 21% with the 
most utilized 29% and the least 15%. This indicates how the selected 
communication companies depends on the banking sector to enhance their 
daily operational activities. 
Interest rate revealed that, institutions does pay an average of 17% on an 
annual bases to the banking sector for facilities granted under the review 
period with the most paid 22% and the least 12% in aggregate value. Debt ratio 
which is measured by the total of debts over the institution total assets and 
demonstrate how the institutions assets are financed. A higher percentage 
indicated a highly geared institution and with huge debt. The debt ratio showed 
an average 42% for the selected institutions, indicated that they are moderately 
geared and with the most at 53% and least at 24% and also fairly skewed. 
The above table shows all banking development variability over the review 
period. The maximum and minimum variation value indicated that, there is 
evidence of growth in the banking sector over the years. The variation in the 
interest rate indicated that there has been a moderate increase over the 
20years review period and serves as an encouragement for institutions to 
benefit from loanable fund and debt variation showed that there has been 
increased in debt level of the communication sector over the years.