We are urging the UK Government to work with British financial institutions and the Money Service Businesses (MSBs) sector to find a durable solution to address the decision of British banks to close their accounts with MSBs and particularly with Somali MSBs which provide financial lifeline services to Somalia and other developing countries.
To date, Somali MSBs remain the safest, fastest, cheapest, and only available way of transferring remittances to Somalia given the absence of other financial transfer mechanism (banks and other regulated financial institutions). In addition, many other diaspora groups from the Horn of Africa – including Ethiopia, Djibouti, Kenya and South Sudan – send remittances to their family members using Somali MSBs.
We recognize that like any other financial institutions Somali MSBs have obligations to comply with the laws and regulations of the lands in which they operate. Somali MSBs have so far been cooperative in complying and adjusting their procedures and policies to ensure they satisfy the standards set by regulators and law enforcement agencies.What is worrying is that, they have not really been assured that even if they do comply they will be given bank accounts. To date, no sanctions, prosecutions or convictions have been imposed for non-compliance against any Somali MSBs that we aware of whistle a number of big financial institutions have been fined and prosecuted for failure to comply with financial regulations and rules.
Remittances sent by the Somali diaspora have been critical drivers for increased living standards, redevelopment, and poverty reduction, and are the most reliable and stable source of primary income for over 40% (about 5 millions) of the Somali population. As IMF mission Chief Rogerio Zandamela put it ‘humanitarian and social conditions in Somalia are among the most daunting in the world’. Over 3 million Somalis are in need of humanitarian aid, amounting to about a quarter of Somalia’s total population.
Not only do Somali MSBs provide essential services to the global Somali diaspora, they also make it possible for international humanitarian and development organizations to provide vital support to Somalis in a country that lacks a more formal public banking system and where war, droughts and famine are frequent threats to people’s livelihoods.
Mo Farah, Team GB’s Double Olympic Champion,World Champion and 6 times European Champion, has thrown himself behind our campaign. Mo’s charity, the Mo Farah Foundation, uses MSBs to transfer cash to some of the people hit hardest by natural shocks and manmade disasters in the world.
Olympic champion Mo Farah says:
“I have been sending money home for a number of years and the Mo Farah Foundation, along with some of the world’s biggest international charities and organisations, including the United Nations, rely on these businesses to channel funds and pay local staff.”
This means that without access to safer and inexpensive channels for cross border remittance flows millions of Somali people would face undue hardship. This is a vital issue both for the British-Somali community and the international community who are committed to seeing Somalia continue to flourish. Due to decisions made by banks in the UK, USA and elsewhere this lifeline existence is under threat, and should this be hindered or cut off, it will do serious damage to the poorest and most vulnerable communities in the world.
The Government has a duty to ensure that individuals, international humanitarian and development organisations are all able to provide assistance and aid to the most vulnerable. Ensuring this continued flow of remittances is both a moral duty and in the UK’s national interest. Most importantly, failure to find lasting solutions would mean creating an alternative unregulated market and raising the cost of sending money, which is not in anyone’s interest.
We support and welcome the UK Government’s plans to set up Action Group on cross-border remittances and the idea of the UK – Somalia remittance Safer Corridor Initiative, led by the Department for International Development and the World Bank. But over a year after initially announcing this initiative, no solution is in place. Deadlines have been pushed back and tangible progress has not been made. As things stand, Somali MSBs have no direct access to bank accounts to operate their business. Whilst the public has been extremely patient in waiting for tangible results, the Government has failed to deliver on this.
Therefore we repeat our previous calls to the UK Government and its partners to:
(i) Continue its efforts to facilitate genuine engagement and dialogue between various stakeholders particularly law enforcement, financial institutions and the remittances sector so that short term to long term UK-Somalia cross-border safer payments systems can be identified and implemented.
(ii) Ensure that banks are engaged and willing to be part of the solution with urgency and recognise the potential detrimental effects of Somali MSBs’ having no direct access to bank accounts and financial services in the first mile.
(iii) Accelerate progress and set a concrete deadline on Safer Corridor initiative.
If enough people add their name to our petition we’ll be able to send a strong message to UK Government to stop moving the goal posts and take every step it can to ensure remittances flow through secure and accessible channels to Somalia.
Please join us and call on UK Government to work with all relevant stakeholders and its partners to find lasting solutions for the Somali MSBs to have direct access to bank accounts.
Together we can make change happen!
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