Somaliland: Dahabshil to Comply with Barclays’s Rules to Keep Account-CEO

Nairobi, Sep 12, 2013 (SDN) -Dahabshil Holdings Ltd., the Somaliland owned money-transfer operator, said it will comply with any new banking rules as humanitarian organizations lobbied to stop Barclays Plc (BARC) from closing the company’s bank account.

“Tell us what we should do and we will do it,” Chief Executive Officer Abdirashid Duale told a conference in the Kenyan capital, Nairobi, on Wednesday.

Barclays, the U.K.’s second-largest bank by assets, said in May it will close the account that Dahabshiil uses to send money back to Somalia on July 10, citing its lack of “strong anti-money laundering governance structures.” That date was moved to Aug. 12 and postponed again to Sept. 30.

As much as $500 million of the $1.5 billion sent home annually by those living abroad to Somalia is handled by London-based Barclays, Duale said. Dubai-based Dahabshil has 24,000 outlets spread across 150 nations, including the U.K.

The United Nation’s resident and humanitarian coordinator for Somalia, Philippe Lazzarini, and non-governmental organizations including Oxfam Somalia and Nairobi-based African Development Solutions, or Adeso, called on Barclays to postpone closing money-transfer operators’ bank accounts for a year to allow time to find a “sustainable solution.”

“Remittances are more and more the backbone of the Somali economy,” said Degan Ali, Adeso’s executive director. “It is much larger than humanitarian assistance and investment combined.”

The humanitarian agencies are lobbying both the U.K. government and lenders to find an alternative solution to address what they call “fears and perception” of risk involved in money transfer to Somalia.

Possible solutions include asking the money-transfer operators and lenders to develop a biometric database of the Somali population because the Somalia government doesn’t have a formal identification system, said Ed Pomfret, acting country director of Oxfam Somalia.

Source: Bloomberg