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Money Transfer Companies Form Association
NAIROBI, 5 Dec 2003 (IRIN) - Somali money transfer companies launched the Somali Financial Services Association (SFSA) on Thursday at a two-day conference in London, attended by representatives of remittance companies, financial regulators from Britain, continental Europe and the United States.
According to a UN Development Programme (UNDP) press statement, the two-day conference was an opportunity for both international regulators and the remittance companies to discuss obstacles facing the sector.
The new body, which is supported by UNDP, brings together 14 money transfer companies "and aims to provide both advocacy and technical support to the industry while also serving as a conduit between members and authorities in foreign countries on issues such as legislation".
“Remittance companies are the largest employers in Somalia,” SFSA Secretary General Muhammed Jirdeh Hussein was quoted as saying. “They also handle millions of dollars belonging to the Somali people. We thought it important to set up a supervisory and accountable authority which would also develop a code of conduct and best practices for the industry."
After the 11 September terror attacks, Somali money transfer companies came under international scrutiny and the biggest company Barakat was shut down after the US government accused it of links with terror groups - a charge vehemently denied by the company.
According to the UN, money transfer companies remit approximately US $750 million annually into the country from Somalis living in the Diaspora.
In a recent interview, Abdirashid M Duale, head of Dahab Shiil, currently the largest money transfer company, told IRIN, a significant number of the transactions relate to investments, commerce and social development projects initiated in the region. For the Somali business sector, remittance companies are the main gateway to the rest of the world.
“Remittances into Somalia help to avert humanitarian crises,” said UNDP Somalia Resident Representative Maxwell Gaylard. “The Association will help safeguard this lifeline into Somalia and contribute to the development of the economy and the capacity of those who drive it.”