Somalia: US bank move highlights importance of remittances

Washington (Keydmedia) - The welfare of hundreds of thousands of Somalis who depend on financial assistance from the diaspora is at risk following a decision by a US bank to close down accounts of Somali money transfer companies in the state of Minnesota by 30 December, according to local and international sources.

Article Keydmedia Online
28 December 2011

Somalis, both in Somalia and in the diaspora, have reacted with dismay at the move by Sunrise Community Bank, arguing that money transfer companies are a lifeline to millions of Somalis who depend on remittances for their livelihoods.

"After suffering conflict and famine, cutting off the only lifeline left for Somalis is tantamount to a death sentence for [many] Somalis," Ilmi Gedi, head of Qaran money transfer company (one of the largest in Somalia), told IRIN. "If the closure goes ahead, it will not only hit those whose families used to get money but also drought- and famine-displaced people supported by other Somalis."

Laura Hammond, a senior lecturer at the School of Oriental and African Studies in London, said the problem was serious with regards to Minneapolis (the largest city in Minnesota and home to an estimated 60,000-80,000 ethnic Somalis) but potentially not critical to remittance-sending from the rest of the USA.

However, Hammond said, if other US banks follow suit and close their doors to Somali money transfer companies, the situation would be very serious.

"The diaspora is one of the main lifelines to [people in] the famine areas and their support is more effective than that of most aid agencies because they are able to deliver funds to precisely where they are needed almost instantly," she said adding: "Aid agencies have technical expertise, but when it comes to getting money to where it