New bank seeks to revolutionise Somalia's financial system

Dec 31, 2014

Hundreds of accounts were opened since the launch of the bank in October.

Hundreds of Somalis have opened accounts and applied for loans since the launch of the first branch of the International Bank of Somalia (IBS) in Mogadishu in October, according to chief executive officer Hassan Yusuf.

He told Sabahi newspaper the bank is a huge step forward for Somalia as it is beginning to bring the country in line with the international banking system and global transfer standards.

The country's economy has for many years relied on remittances from migrants.The UN estimates that 40 per cent of the Somali population relies on such remittances.

However,
many banks across the globe decided to close the bank accounts of Somali money transfer companies over concerns that the money transmission sector was at risk of being used for money laundering and terrorist funding, and did not meet new regulatory requirements.

"The need that exists in the country encouraged us to open this bank," Hassan Yusuf said. "During the last 23 years of war, Somalia has operated under its own [financial] system, while around the world there was an international standard of operation. Therefore, we must now abandon the previous system and comply with global standards."

To that endeavour, he said, the new bank applied for and was issued a SWIFT (Society for Worldwide Interbank Financial Telecommunication) code, a unique identifier used to transmit messages and money transfers between financial institutions.

"We also have to change how the world perceives Somalia by making tangible progress; for example, by streamlining the financial sector and enabling the bank to directly deal with other global banks," he said.

The bank employs more than 50 people at the main branch operating in Mogadishu and there are plans to open five other branches in the city by March 2015.ADNFCR-2976-ID-801768091-ADNFCR