Thursday, 4 September 2003

Dahabshiil - Global Hawala from Somalia

September 4th 2003I

nterview With Abdirashid Duale, CEO of Dahab Shiil Money Transfer CompanyINTERVIEW – September 4, 2003 (IRIN) - Dahab Shiil Group is the largest money transfer company in Somalia, with over 1,000 employees. After 11 September 2001, Somali money transfer companies came under international scrutiny and the biggest company Barakat was shut down after the US government accused it of links with terror groups - a charge vehemently denied by the company. Here Abdirashid M Duale, the CEO of Dahab Shiil, tells IRIN of some of the challenges facing the remittance business and his company in particular.

There have been accusations that Somali remittance companies are not transparent in their operations. How transparent is Dahab Shiil?

The whole process of Dahab Shiil money transfer and remittance is fully transparent. Every transaction is meticulously recorded at the point of collection as well as payment.

  • Every sender is given a receipt and every recipient signs a payee-voucher.
  • So there is a paper as well as an electronic trail for each transfer.

Our records are open to any concerned authority that wishes to peruse. We not only bear our allegiance to our clients but also obey the laws of the countries that we operate in.

We have clear policies and modes of operation that are free of anomalies.

All transactions go to our head office for checking, processing and authorization.

Dahab Shiil works within its communities, it knows its clients, and its agent knows the sender and the recipient.

How wide is your reach in the Somali regions and in the Diaspora? For example can anyone send money to any place in Somalia, no matter how small?

Dahab Shiil has a large worldwide network. It has a representation of approximately 400 agents and branches in 34 countries around the world. It is represented in practically every country where there is a significant Somali community.

About the amount of money sent, yes, anyone can send whatever amount he or she wishes to any part of the Horn of Africa and also receive it through Dahab Shiil.

How many clients do you serve?

Well, when you speak of a client, the thought may be about the person sending the money. We at Dahab Shiil hold both the sender and the receiver as part of our network of clients. About the number of our clients, well at least every Somali in the Diaspora has engaged our services and the same can be said of the Somalis living in the Horn and East of Africa.

How much money do you handle in an average year and what is the average transfer?

  • Over 90 percent of the transactions still consist of small amounts of less than $200 sent mainly from Europe and North America to support dependants or to help relatives and friends out of difficulties.
  • These small amounts of transfers sent through us when added together amount to millions of dollars a year.
  • However, a significant number of transactions relate to investments, commerce and social development projects initiated in the region of the Horn of Africa.
  • For the Somali business sector, Dahab Shiil is their main gateway to the rest of the world.
  • Barakaat was known for providing people with small loans to start businesses and served as a place to deposit money safely for a short term.

Do you provide such services?

Dahab Shiil acts as a financial institution for a wide spectrum of the Somali society, whether individuals, enterprises or international organisations and provides a range of services to its clients, including small loans.

It also facilitates international payments for imports. As people trust Dahab Shiil with their money, it serves as a conduit for investment funds, and hence plays a major role in the development of the country.

Dahab Shiil works with United Nations agencies as well as other international organisations in the region, facilitating their development and humanitarian projects.

Given the fact that money transfer companies, likes yours, are under great deal of pressure since September 11, do you have any plans to set up a bank in the future?

We are already existing as a bank in Southern Somalia where we are offering all the services of an ordinary bank and we are currently negotiating with the authorities in Somaliland towards achieving the same. Our vision is to become the first fully-fledged Somali Commercial Bank that works in partnership with foreign banks.

Dahab Shiil recently acquired a licensed foreign exchange in Dubai and Djibouti, which will make it possible for Dahab Shiil to access international banking services including the use of the standard swift code.

What has been your greatest challenge since September 11?

The events of September 11 have had an enormous impact on the financial services sector. These difficulties are not unique to Somali remittance companies but have affected all money transfer businesses throughout the world. Before this date there was little regulation governing remittance, and neither law enforcement agents nor legislators paid much attention to it.

After September 11, it suddenly caught international attention and became the focus of the media and governments.

  • Rules and regulations were rushed through houses of parliament and government departments.
  • In a very short time we found ourselves faced with a host of guidelines and laws to follow and comply with.
  • In response we embarked on a campaign to apply for and register our operations with concerned authorities in all the countries where we are represented.
  • Secondly, we trained staff on rules and procedures
  • Thirdly we published guidelines for our agents on how to detect suspicious transactions and report them.
  • In addition, Dahab Shiil will soon introduce propriety software that will make it possible for all its agents to provide near real time transfers of funds and make reporting requirements mandatory.
  • The new software program will incorporate a "lookout list" published by international authorities.
  • Some of the challenges we face can only be addressed either by a recognised Somali authority or international agencies concerned about the welfare of the Somali people.

The European Union and United Nations Development Programme have made great efforts in the last two years to study and understand the issues facing Somali remittances. But the sector has still some way to go to fully realise its potential, and needs technical and political support from the international community.

How does Somali society benefit from your operation?

The Somali money transfer sector has expanded and has come a long way in a relatively short time. It enabled the Somali community to survive on its own and today it is a lifeline service on which the livelihood of millions of Somalis depends. The importance of this service cannot be over-estimated. Remittances from the Diaspora save lives daily. One can say without much argument, that without remittances coming from abroad many people would not have survived the prevailing poverty conditions and the huge unemployment.

Without it the figures for asylum seekers migrating to Europe and North America would have steeply risen as the poverty-stricken community, with no meaningful sources of livelihood, migrated for "better lives" abroad.

Investment and reconstruction would have been much more difficult. Remittances also play an instrumental role in the peace-building that has taken place in many Somali communities and the international community would have been asked to provide much more financial assistance than it currently provides.

The Rest @ Somaliland Times

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