Somalians in London protesting at Barclays bank. They want to maintain remittances sent to the Horn of Africa state through the financial institution., a photo by Pan-African News Wire File Photos on Flickr.
Somalia welcomes bank remittance reprieve
Published — Tuesday 5 November 2013
Author: AFP
MOGADISHU: Somali money transfer company Dahabshiil has welcomed a temporary injunction by a British court allowing it to continue transferring vital funds that dwarf levels of foreign aid to the war-torn nation.
With no formal banking system, diaspora Somalis turn to money transfer services to support their families back home, sending some $1.3 billion (1 billion euros) each year, according to aid agencies Oxfam and Adeso.
Barclays, the last major British bank still working with transfer companies, had said it would close all dealings with money transfer systems, cutting a $500 million (380 million euro) yearly flow to Somalia.
But Dahabshiil challenged the move in a London court.
“The court handed down its judgment, granting an interim injunction which has the effect of preserving Dahabshiil’s banking arrangements with Barclays until the conclusion of a full trial,” the company said in a statement.
Banks have been tightening rules in a bid to comply with international regulations against money laundering and funding terrorism, but experts said that there were no known cases of regulatory breaches by Somali companies.
“We are not just a business... We enable Somalis to help themselves, by sending money to every corner of the Somali territories to enable relatives and friends to buy food, medicine and to pay for education,” the company added.
“Remittances are also used for investment in business start-ups and property, remittances are helping Somalis get the country back onto its feet.”
It was feared that closing organized transfers could drive them underground.
Somali Prime Minister Abdi Farah Shirdon welcomed the decision, while warning that a “permanent solution must be found to keep open this vital lifeline.”
The best solutions would be to set up formal banking systems, experts say.
Somalis send money back home via transfer businesses which can accept deposits abroad and immediately credit recipients back home.
But regulations require transfer systems pass money through a bank account.
“As Somalia continues to recover from two decades of unrest these remittances remain an essential source of income for more than half of all Somalis,” Shirdon added.
“To many these remittances pay for a basic standard of living, allowing families to put food on the table, clothe their family, treat illnesses and educate their children.”
Charity groups have been campaigning to keep the transfer system afloat.
“The ruling provides a small window of opportunity for Somalis living in the UK to send money home to loved ones in one of the poorest countries in the world,” Oxfam’s Ben Phillips said.
“However, this does not solve the problem — a long-term fix is needed to safeguard hundreds of thousands of people relying on the money for food, medicines and education.”
No comments:
Post a Comment