Dahabshiil

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Dahabshiil
دهب شيل
Industry Money transfer
Founded 1970
Burao, Somalia
Headquarters Dubai, United Arab Emirates
Key people
Abdirashid Duale
Revenue $300 million USD (2009)
Number of employees
over 2000 worldwide in 126 nations
Website www.dahabshiil.com

Dahabshiil (Somali: Dahabshiil, Arabic: دهب شيل‎) is an international funds transfer company headquartered in Dubai, United Arab Emirates.[1] Formed in the early 1970s, the firm operates from over 24,000 outlets and employs more than 2,000 people across 126 countries.[2] It provides financial services to international organisations, as well as to both large and small businesses and private individuals.[3][4][5] The company is also involved in numerous community building projects in Somalia.[3]

History[edit]

A Dahabshiil franchise outlet in Brisbane, Australia.

Dahabshiil (meaning "Gold smelter"[1]) was founded in 1970 by Mohamed Said Duale, a Somali entrepreneur based in Burao, the capital city of Togdheer province in the modern-day Somaliland region of Somalia.[6]

Initially a general trading enterprise, the firm began specialising in remittance broking during the 1970s, when many Somali males from northern Somalia migrated to the Gulf States for work. This resulted in a growing demand for services to transfer money from those migrant workers back to their families.[1][7]

Because of foreign exchange controls imposed by the Somali government at the time, most of the funds were transferred via a trade-based system known as Franco Valuta (FV); the latter process involved the import of goods, proceeds from the sale of which were sent to migrants’ families.[8] These transactions formed the bulk of Dahabshiil’s business throughout the 1980s.[9]

With the Somali Civil War fast approaching, the Duale family were among the hundreds of thousands who retreated to the Somali-inhabited Ogaden region in neighbouring Ethiopia. The business in Somalia collapsed, but Duale was able to draw on an extensive network of contacts in the Gulf to re-establish the venture, setting up a small office in Ethiopia to serve displaced Somali communities there and in Djibouti.[10]

In 1989, Dahabshiil opened its first office in London, where a number of Somalis had arrived during the war. The UK arm was managed by Mohammed Duale’s son, Abdirashid Duale, who began to expand the business as the Somali population in the UK grew.[11]

Somali money transfer industry[edit]

A Dahabshiil franchise outlet in Puntland, Somalia.

Funds transfer services have become a large industry in Somalia.[4] Estimates of the aggregate value of remittances from the Somali diaspora back to the home country vary. However, a recent study by the United Nations Development Programme suggested a figure of around $1.6 billion, sent largely by emigrants in the US, Europe and the Gulf region.[12][13] Industry experts estimate that Dahabshiil handles around two-thirds of all remittances to Somali-speaking regions.[14]

Most of the Somali money transfer operators (MTOs) are credentialed members of either the Somali Money Transfer Association (SOMTA), an umbrella organisation that regulates the community's money transfer sector, or its predecessor, the Somali Financial Services Association (SFSA). Besides Dahabshiil, Somali MTOs include Qaran Express, Mustaqbal, Amal Express, Kaah Express, Hodan Global, Olympic, Amana Express, Iftin Express and Tawakal Express. A unique feature of these Somali funds transfer companies is that they all charge lower commission fees than their Western counterparts; typically around 5% for sums of up to $1,000, a range encompassing the vast majority of Somali household remittances. For amounts greater than $1,000, Somali MTOs charge commissions of 3% to 4%, significantly lower than Western Union's 7.1% fee and MoneyGram's 7.2% fee for sending similar amounts to Ethiopia. Charges for the remittance of charity funding vary between 0% and 2%.[5]

Accounting for almost a quarter of household income in Somalia, funds remitted by the Somali diaspora have helped to sustain communities in some of the most remote locations in the Horn of Africa.[12][15] With around 40% of households receiving such assistance from relatives working abroad, remittances have proved significant in promoting private sector activity in telecoms, transport and housing, as well as in basic infrastructure, health and education.[15][16] It has also been argued that the inflow of such foreign-based capital has helped keep the Somali shilling afloat and offset depreciatory and inflationary pressures.[17]

Company overview[edit]

Branches and transfer network[edit]

Dahabshiil is the largest of the Somali money transfer operators (MTOs), having captured most of the market vacated by Al-Barakaat. The firm has its headquarters in Dubai and employs more than 2,000 people across 126 countries, with 130 branches in Somalia, a further 130 branches in the United Kingdom, and 400 branches globally.[18][19][20] Its worldwide network comprises more than 24,000 agent and branch locations, and the company offers both SMS notification and 24-hour online transfers.[21][22]

Products and services[edit]

A Dahabshiil franchise outlet in Columbus, Ohio.

Remittance transfer remains Dahabshiil’s core business, but the company has diversified to offer financial services to international organisations, businesses and private individuals.[23] Most of the major international development organisations operating in Somalia use Dahabshiil to transfer funds, including the UN, WHO, World Bank, Oxfam, Save the Children and Care International.[24]

In 2008, Dahabshiil acquired a majority stake in Somtel, a Somaliland-based telecommunications firm specializing in high speed broadband, mobile internet, and mobile phone services.[25][26] The acquisition provided Dahabshiil with the necessary platform for a subsequent expansion into mobile banking, a growth industry in the regional banking sector.[27][28]

In early 2009, Dahabshiil opened an Islamic bank, Dahabshiil Bank International, in Djibouti.[29] An international bank, DBI provides services to business and private clients demanding Shariah-compliant financing.[30] Operations centre on asset finance, partnership finance and lease finance.

That same year, Dahabshiil teamed up with leading Somali retailers, hotels, restaurants, and petrol stations to launch ‘Dahabshiil eCash’, Somalia’s first debit card service.[31][32]

Community investment[edit]

Dahabshiil invests 5% of its annual profits in community projects aimed at improving schools, hospitals, agriculture and sanitation services.[24] It also sponsors a number of social events, including the Somali Week Festival and the Somali Youth Sports Association in the UK, which help to promote understanding and cooperation through Somali art and culture and sport, respectively.[33] After the tsunami of 2005, the company helped provide immediate relief to the people in the regions of Somalia that were most affected.[34] In 2009, the firm also donated $20,000 toward the establishment of a state-of-the-art mental health facility in Garowe, the administrative capital of the northeastern Puntland region of Somalia.[35]

Compliance[edit]

Dahabshiil’s services are managed according to international regulations to combat terrorism, money laundering and other illegal activities.[36] The firm is a member of the International Association of Money Transfer Networks (IAMTN), the UK Money Transmitter Association and the USA Money Transmitter Association, and is fully compliant with AML (Anti Money Laundering) regulations.[25][37]

In 2010, Dahabshiil became the first international payments firm to achieve authorisation from the UK Financial Services Authority (FSA), under the Payment Services Regulations of that year which demand the highest standards of security, customer protection, transparency and speed of delivery.[38]

In May 2013, Barclays announced its decision to end the banks business relationship with Dahabshiil, citing a lack of "strong anti-laundering governance structures." The decision was delayed after British lawmakers lobbied Barclays.[39] In July 2013, Mo Farah, the Somali-born Olympic gold medalist, joined legislators and activists in a campaign urging Barclays Bank to repeal its decision to withdraw from the UK remittance market.[40] On 5 November 2013, the High Court in London granted an interim injunction preserving the banking arrangement between Dahasbhiil and Barclays until the conclusion of a full trial.[41] Judge Launcelot Henderson described Barclays' decision to terminate Dahabshil's account as "unfair", and requested a detailed examination into the reasons behind the bank's decision.[42]

Controversies[edit]

Guantanamo Bay detainee[edit]

In February 2009, Peter Finn writing in The Washington Post, cited allegations that Guantanamo captive Mohammed Sulaymon Barre, while working for Dahabshiil, may have laundered money for terrorists. He suggested this was an example of the difficulties that faced the joint task force US President Barack Obama had put in place to conduct new reviews of the detainees' status.[43]

Website shutdown[edit]

In 2011, a group of independent Somali journalists alleged that Dahabshiil had temporarily succeeded in convincing their web-host to shut down their site because they had published stories critical of the firm.[44] They published a copy of a letter faxed to their webhosting service, demanding the removal of over a dozen of their articles about Dahabshiil.[45] The reporters also suggested one of the stories Dahabshiil wanted removed concerned a song by popular Somali singer Saado Ali Warsame that was critical of Dahabshiil.[44]

Bell Pottinger[edit]

In 2011, an undercover investigation by The Independent suggested that public relations firm Bell Pottinger had been contracted by Dahabshiil to minimise any negative reporting of the company, including the Guantanamo Bay detainee affair.[46] The Bell Pottinger executives detailed their techniques, which purportedly included manipulating the ranking of Google search results to suppress unwanted coverage, and also boasted that they had a 'team' that could manage Wikipedia articles. The contract was said to have been a success.[47]

Awards[edit]

In 2008, Dahabshiil's CEO, Abdirashid Duale, was awarded Top Manager of the Year by the International Association of Money Transfer Networks in recognition of the outstanding services that the firm offers its clients.[34] This was followed in 2010 with the UK's Mayor of Tower Hamlets award for excellence in the community, which recognizes the "outstanding contribution" Dahabshiil has made to the local, national and international Somali community over the last 40 years.[33]

References[edit]

  1. ^ a b c Jaco Maritz (5 October 2010). "Running a thriving money transfer business from Somalia". How we made it in Africa. Retrieved 2011-12-10. Dahabshiil, a Somali word reportedly meaning gold smelter, was born as a result of Somalia’s civil war, when those living outside the country had to send money to their relatives and friends back home. mirror
  2. ^ Katrina Manson (24 May 2011). "Money man serves the Somali diaspora". Forbes. Archived from the original on 10 December 2011. Retrieved 2011-12-10. 
  3. ^ a b "Decades of community service recognised with award". Tower Hamlets Recorder. 13 May 2010. Retrieved 2011-12-10. mirror
  4. ^ a b Paul Trustfull. "Freeing Finance: If money makes the world go round, Dahabshiil CEO Abdirashid Duale makes sure it goes to the right people". Forbes. Retrieved 2011-12-10. mirror
  5. ^ a b UK Somali Remittances Survey
  6. ^ Matthew Saltmarsh "Somalis’ Money Is Lifeline for Homeland", The New York Times (11 November 2009).
  7. ^ Overseas Development Institute
  8. ^ COMPAS Publications
  9. ^ Global Security
  10. ^ Hiiraan
  11. ^ Harowo
  12. ^ a b United Nations Development Programme
  13. ^ United Nations Industrial Development Organization
  14. ^ Mobile Money Africa
  15. ^ a b The Norwegian Council for Africa
  16. ^ World Bank Social Development Papers
  17. ^ "Business in Somalia: Commerce amid chaos. Canny traders adapt to anarchy", The Economist (10 February 2011).
  18. ^ "Dahabshiil". Retrieved 14 April 2015. 
  19. ^ UK Somali Remittance Survey
  20. ^ Yahoo! Finance
  21. ^ International Association of Money Transfer Networks
  22. ^ Odindo Ayieko All Africa "Somalia: Amid the Chaos, Money Transfer is Booming Business", allafrica.com (20 September 2010).
  23. ^ All Africa
  24. ^ a b "Entrepreneur Spotlight: Abdirashid Duale", The African Business Journal (July 2010).
  25. ^ a b International Association of Money Transfer Networks
  26. ^ Yahoo! Finance
  27. ^ TechChange
  28. ^ Monty Munford "Guest Post: Could Tiny Somaliland Become the First Cashless Society?", TechCrunch.com (5 September 2010).
  29. ^ Financial Technology Africa
  30. ^ Somali Directory
  31. ^ "eCash service launched in Somalia", mobilemoneyafrica.com (1 November 2009).
  32. ^ "Somalis get first-ever debit card". BBC News. 28 October 2009. 
  33. ^ a b "Decades of community service recognised with award". Tower Hamlets Recorder. 13 April 2007. Retrieved 3 June 2010. 
  34. ^ a b Trustfull, Paul. "Freeing Finance: If money makes the world go round, Dahabshiil CEO Abdirashid Duale makes sure it goes to the right people". Forbes. Retrieved 3 June 2010. 
  35. ^ Puntland leader launches welfare agency
  36. ^ Somalia JNA
  37. ^ Harowo
  38. ^ Financial Services Authority
  39. ^ Barclays Defends Somali Account Closing on Money-Laundering Risk
  40. ^ Muir, Hugh (26 July 2013). "Mo Farah pleads with Barclays not to end remittances to Somalia". The Guardian. Retrieved 29 July 2013. 
  41. ^ Somalia: Dahabshiil Receives Reprieve Against Barclays
  42. ^ Somali Money Transfer Company Wins Injunction Against Barclays Bank
  43. ^ Peter Finn (17 February 2009). "Sorting through complex, and often flawed, cases: Investigators set out to decide detainees' fate". Washington Post. Retrieved 2011-12-09.  mirror
  44. ^ a b "On the other hand, the Dahabshiil Company shut down the sunatimes.com". Suna Times. 27 October 2010. Retrieved 2011-12-10. mirror
  45. ^ Bird & Bird (27 April 2011). "re: www.sunatimes.com" (PDF). Suna Times. Retrieved 2011-12-10. mirror
  46. ^ Newman, Melanie; Wright, Oliver (6 December 2011). "Caught on camera: top lobbyists boasting how they influence the PM". London: The Independent. Retrieved 2011-12-10. mirror
  47. ^ "Dahabshiil -- you couldn't find it within the first 10 pages.". Suna Times. 7 December 2011. Retrieved 2011-12-09.  mirror

External links[edit]