Money Keeps Moving Toward Somalia, Sometimes In Suitcases

Monday, May 18, 2015

The closing of one of the few remaining U.S. banks to send money to Somalia set off alarm bells last February in the small but ever-growing community of Somali immigrants who moved to America in search of jobs to support relatives back home.

In the months since, however, remittance companies have found a way to get funds back to the increasingly desperate state in the Horn of Africa. The solution, it turns out, doesn’t require a bank — just a plane ticket and a large carry-on suitcase.

More than 40 percent of Somalia’s population depends on money transfers to buy food, medicine, and other basic needs, according to aid group Oxfam International. But the vital flow of support has been repeatedly threatened over the past few years amid an international counterterror crackdown against the Somali-based militant group al-Shabab.

That’s spooked banks from sending money to Somalia — where the terrorism risk is high and the capacity of the local government to police financial systems is low — for fear of potentially violating sanctions, and incurring multibillion-dollar fines, should the funds fall into the wrong hands.

Source: Foreign Policy (link opens in a new window)

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banking, cash, poverty alleviation, remittances