A Dahabshiil franchise outlet in Puntland, Somalia. © Flickr user warsame90
Appeared in: Volume 9, Number 3
Published on: December 19, 2013
Picking Up the Pieces
Banking on Somalia

Somalia’s informal banking system is one of the only coherent institutions in the country—so why is U.S. policy undermining it?

Armin Rosen is a freelance journalist based in Washington, DC. He has reported from Africa and the Middle East, including South Sudan, the Democratic Republic of Congo, and Egypt.
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  • free_agent

    You write, “The company does not franchise unless its central
    offices are sufficiently convinced that the branch owners command the
    respect and authority needed to navigate local clan and militia

    I suspect that the security Dahabshiil enjoys is derived from its ability to cut off any faction or clan from remittances, backed up by a known willingness to track down and take revenge on anyone that attacks the office.

  • free_agent

    A Somali says, “Without hawalas, there is no life here in Somalia”.

    It’s an interesting form of globalization. In the bad old days, if an economy had collapsed so completely, emigration and starvation would have depopulated the area. Now, you can have a huge free-fire zone that millions live in for decades.

    • TommyTwo

      Somalia is merely an extreme example. See also Mexico or the Philippines. Remittances from abroad help keep people barely afloat and thus reduce the pressure for improvements within the home country. (Then again, so does unearned wealth, whether in the form of the devil’s excrement or of inherited societal intangibles.)

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