Ziraat Katılım gets license to operate in Somalia

MOGADISHU

Somalia has announced it had awarded licences to two foreign banks, including Türkiye’s participatin bank Ziraat Katılım, as the nation opens up the industry to international lenders.

Ziraat Katılım and state-owned Banque Misr of Egypt and will become the first international banks to operate in the country, Somalia’s Central Bank said in a statement.

Ziraat Katılım Bankası was established with the permission of Türkiye’s Banking Regulation and Supervision Agency (BDDK) in 2014 with a capital of 675 million Turkish Liras paid entirely by the Treasury. It obtained an operating license with the decision of the BDDK in 2015.

“The application of both banks underwent months of an extensive process,” it said, adding that they had the green light to establish and operate branches.

“They are both solid banks that will add value to the development of Somalia’s financial sector and contribute to the growth of our economy,” the statement quoted Central Bank of Somalia governor Abdirahman Mohamed Abdullahi as saying.

One of the poorest countries in the world, with more than 70 percent of its population living on less than $1.90 a day, Somalia is struggling to recover from decades of civil war.

The country of 15 million people has at least a half a dozen commercial banks, with some offering services via the hawala system, an informal network of money transfers conducted through face-to-face guarantees.

Hawalas are cheap and efficient to use, allowing money to be deposited in a foreign bank and instantly credited to recipients who have to provide only basic identity details matching those provided by the sender.

The announcement on July 3 comes barely six weeks after President Hassan Sheikh Mohamud took office following a long-overdue election and a political crisis that lasted well over a year.