Barclay’s bank to withdraw money transfer licences from Somali ‘Xawalas’

London, Jun 22, 2013 (SDN) – Barclays is withdrawing their business support for money transfer companies – the Somali xawalas (including Dahabshiil). The reason for the decision to stop the licence of the Somali transfers has not been made clear by the Bank which is the only bank that all money transfers to Somalia were routed through. That means the money transfer from UK will soon cease if the decision of Barclay’s Bank is not reversed.

A letter that Medeshi obtained from an anonymous source reveals that :

“ Dahabshiil themselves have approached 23 banks to try and find one who will take over from Barclays in providing the banking support they need to retain their licence to offer financial services in the UK. All 23 have declined. Barclays also have so far refused to change their policy. If Dahabshiil and other money transfer companies lose their licence here, they will not be able to transfer money from the UK to anywhere. All Somali money transfer companies (and others) are affected. The Somali situation is unique in that there are no other ‘formal’ banking options to fall back on.

Without banks willing to partner with them, the Somali MSBs will lose their licenses, effectively bringing an end to legal money transfer from the UK, other parts of Europe, and also countries in Africa.”

The situation does not look good for the money remittance in Somalia and Somaliland because there are no formal banks in these two countries. The same process seems to be repeating itself when the US closed the largest Somali money transfer ( Barakat) after 9/11 . US president, George Bush  at that time argued that ’Somalis are natural entrepreneurs and would find another way to deal in money transfers “ .
It would therefore, be advisable for all Somalis and Somalilanders to prepare for the consequences of the stoppage of legal /formal money transfers from Europe , North America and other parts of Africa. The move could trigger illegal money or informal money transfers as this is the lifeline of millions of people that live in East Africa.

Source: Medeshivalley