Somalia Residents Cry Foul over Money Transfer Cancellation

Thousands of Somali nationals in the United States and the United Kingdom are now facing a challenge sending money home after a number of banks cancelled the service.

Barclays and Merchants Bank of California are among the banks that have cancelled the services that facilitated the remittance of money from the Diaspora to Somalia.

The cancellation has caused panic among families in Somalia, with most businesses running short of funds just two weeks down the line.

Somalia has no formal banking system due to decades of war and therefore its citizens living abroad have often used money transfer companies to send some Sh119 billion home each year – far more than the country receives in aid, according to a report released last Thursday by Oxfam and African Development Solution (Adeso), a charity and development agency.

NO OTHER SOURCE OF INCOME

Hassan Diirshe, a resident in Somalia, says he has no other source of income than the money he receives from his son in the United States.

“I’ve already withdrawn 50 USD from what my son sent from abroad. Our lives rely on the small amount we receive from him since I do not have any other source of income," he said.

Anab Abdullah says she depends on the money from abroad to take care of five children, some of who are orphans.

“I have five children and I receive 50 USD every month, but now I am really worried with the banks’ move to stop money transfers to Somalia," she said.

Forty per cent of Somalis rely on remittances for daily needs such as food, medicines and school fees in a country grossly affected by drought, hunger and security threats from the Al Shabaab militia.

FUNDING TERRORISTS

Several banks in the US have halted remittance services to Somalia over the last few years because of regulations that hold banks responsible in case the transfer funds 'terrorist' groups like Somali's Al Shabaab.

Britain's Barclays Bank closed its accounts with Dahabshiil, the largest money transfer company in Somalia, in 2014 while Australia’s Westpac, the only bank transferring money to Somalia, is due to close their accounts at the end of March, according to the report.

While most transactions are a few hundred dollars sent to needy family members, it is Somalia’s business community transferring thousands of dollars who have started feeling the impact of the closures.

DISAPPOINTED CUSTOMERS

Abdulkadir Ali, a director at Juba express Money Transfer in Mogadishu, says he has to deal with a lot of disappointed customers these days and it will get worse if the closures continue.

“The main challenge we face now is that the clients come to the office and ask for money and I have to tell them that we could not transfer their money from abroad,” he said.

The report states that there is a bit of scrambling trying to find alternative money transfer operators to help carry out the money transfers.

"We are requesting American authorities not to shut down the transfer of money and instead create a system where they can control the flow of this money,” said Somali lawmaker Abdullah Ahmed Hussein.

REQUIRE AID

He added that millions of Somalis risk their livelihood, a fact that could lead to an increase in crime.

Britain has been working with the World Bank on a 'safer corridor' initiative to tighten the scrutiny of Somali money transfers through measures such as biometric identity cards for recipients in Somali.

It has also told banks dealing with money transfer companies in Somalia that they will not be prosecuted if money ends up in the wrong hands if they can show they have undertaken due diligence.

The United States Government has however not set up any measures to ensure money continues to flow into Somalia where 3 million people – about a third of the population – require aid, campaigners said.

By Stephen Gitau

Tags:

business somalia

Want to send us a story? Submit on Wananchi Reporting on the Citizen Digital App or Send an email to wananchi@royalmedia.co.ke or Send an SMS to 25170 or WhatsApp on 0743570000

Leave a Comment

Comments

No comments yet.

latest stories