Dahabshiil
Encyclopedia
Dahabshiil is an international funds transfer
company headquartered in Dubai
, United Arab Emirates
. Formed in the early 1970s, the firm operates from over 24,000 outlets and employs more than 2,000 people across 144 countries. It provides a broad range of financial services to international organisations, as well as to both large and small businesses and private individuals. The company is also involved in numerous community building projects.
") 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.
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.
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. These transactions formed the bulk of Dahabshiil’s business throughout the 1980s.
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
.
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.
services have become a large industry in Somalia, with the country now offering some of the most advanced and competitively priced telecommunications and internet services in the world. 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. Industry experts estimate that Dahabshiil handles around two thirds of all remittances to Somali-speaking regions.
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 Qur'an 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%.
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
. 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. 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.
, WHO, World Bank
, Oxfam
, Save the Children
and Care International.
In 2008, Dahabshiil acquired a majority stake in SomTel, a Somaliland-based telecommunications firm specialising in high speed broadband, mobile internet, and mobile phone services. The acquisition provided Dahabshiil with the necessary platform for a subsequent expansion into mobile banking, a growth industry in the regional banking sector.
In early 2009, Dahabshiil opened an Islamic bank, Dahabshiil Bank International, in Djibouti
. An international bank, DBI provides services to business and private clients demanding Shariah-compliant financing. 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.
, the company helped provide immediate relief to the people in the regions of Somalia that were most affected. 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.
, money laundering
and other illegal activities.
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.
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.
Wire transfer
Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
company headquartered in Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
, United Arab Emirates
United Arab Emirates
The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
. Formed in the early 1970s, the firm operates from over 24,000 outlets and employs more than 2,000 people across 144 countries. It provides a broad range of financial services to international organisations, as well as to both large and small businesses and private individuals. The company is also involved in numerous community building projects.
History
Dahabshiil (meaning "Gold smelterGoldsmith
A goldsmith is a metalworker who specializes in working with gold and other precious metals. Since ancient times the techniques of a goldsmith have evolved very little in order to produce items of jewelry of quality standards. In modern times actual goldsmiths are rare...
") was founded in 1970 by Mohamed Said Duale, a Somali entrepreneur based in Burao, the capital city of Togdheer
Togdheer
Togdheer is an administrative region in northwestern Somalia. It lies in the territory of Somaliland, a self-declared republic that is internationally recognized as an autonomous region of Somalia.-Overview:...
province in the modern-day Somaliland
Somaliland
Somaliland is an unrecognised self-declared sovereign state that is internationally recognised as an autonomous region of Somalia. The government of Somaliland regards itself as the successor state to the British Somaliland protectorate, which was independent for a few days in 1960 as the State of...
region.
Initially a general trading enterprise, the firm began specialising in remittance broking during the 1970s, when many Somali males from northern Somalia
Somalia
Somalia , officially the Somali Republic and formerly known as the Somali Democratic Republic under Socialist rule, is a country located in the Horn of Africa. Since the outbreak of the Somali Civil War in 1991 there has been no central government control over most of the country's territory...
migrated to the Gulf States
Arab states of the Persian Gulf
"Arab states of the Persian Gulf" or "Arab Persian Gulf states" or "Persian Gulf Arab states" or "Arabic Persian Gulf states" or "Arab States of The Gulf", are terms that refer to the six Arab states of Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Bahrain and Oman, bordering the Persian Gulf....
for work. This resulted in a growing demand for services to transfer money from those migrant workers back to their families.
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. These transactions formed the bulk of Dahabshiil’s business throughout the 1980s.
With the Somali Civil War
Somali Civil War
The Somali Civil War is an ongoing civil war taking place in Somalia. The conflict, which began in 1991, has caused destabilisation throughout the country, with the current phase of the conflict seeing the Somali government losing substantial control of the state to rebel forces...
fast approaching, the Duale family were among the hundreds of thousands who retreated to the Somali-inhabited Ogaden
Ogaden
Ogaden is the name of a territory comprising the southeastern portion of the Somali Regional State in Ethiopia. The inhabitants are predominantly ethnic Somali and Muslim. The title "Somali Galbeed", which means "Western Somalia," is often preferred by Somali irredentists.The region, which is...
region in neighbouring Ethiopia
Ethiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...
. 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
Djibouti
Djibouti , officially the Republic of Djibouti , is a country in the Horn of Africa. It is bordered by Eritrea in the north, Ethiopia in the west and south, and Somalia in the southeast. The remainder of the border is formed by the Red Sea and the Gulf of Aden at the east...
.
In 1989, Dahabshiil opened its first office in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, where a number of Somalis had arrived during the war. The UK arm was managed by Mohammed Duale’s son, Abdirashid Duale
Abdirashid Duale
Abdirashid Duale is an award-winning British Somali entrepreneur, philanthropist, and the CEO of the multinational enterprise Dahabshiil.-Biography:...
, who began to expand the business as the Somali population in the UK grew.
Somali money transfer industry
Funds transferWire transfer
Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
services have become a large industry in Somalia, with the country now offering some of the most advanced and competitively priced telecommunications and internet services in the world. 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
United Nations Development Programme
The United Nations Development Programme is the United Nations' global development network. It advocates for change and connects countries to knowledge, experience and resources to help people build a better life. UNDP operates in 177 countries, working with nations on their own solutions to...
suggested a figure of around $1.6 billion, sent largely by emigrants in the US, Europe and the Gulf region. Industry experts estimate that Dahabshiil handles around two thirds of all remittances to Somali-speaking regions.
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 Qur'an Express, Mustaqbal, Amal Express
Amal Express
The AMAL Express is the second largest money remittance company in Somalia. The company has worldwide network of associate companies and agencies. AMAL EXPRESS, was found in 1997 from the joining of 13 individual money remittance firms....
, 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
Western Union
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until 2006, Western Union was the best-known U.S...
7.1% fee and MoneyGram's
MoneyGram
MoneyGram International, Inc. is a US-based, Global Money transfer company, headquartered in Dallas, Texas. It has Global Operations Centers in Saint Louis Park, Minnesota and Brooklyn Center, Minnesota, Global Call Center Operations in Denver, Colorado and regional and local offices around the...
7.2% fee for sending similar amounts to Ethiopia. Charges for the remittance of charity funding vary between 0% and 2%.
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
Horn of Africa
The Horn of Africa is a peninsula in East Africa that juts hundreds of kilometers into the Arabian Sea and lies along the southern side of the Gulf of Aden. It is the easternmost projection of the African continent...
. 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. It has also been argued that the inflow of such foreign-based capital has helped keep the Somali shilling
Somali shilling
The Somali shilling is the official currency of Somalia...
afloat and offset depreciatory and inflationary pressures.
Branches and transfer network
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 144 countries, with 130 branches in Somalia, a further 130 branches in the United Kingdom, and 400 branches globally. Its worldwide network comprises more than 24,000 agent and branch locations, and the company has invested in state-of-the-art technologies to offer both SMS notification and 24-hour online transfers.Products and services
Remittance transfer remains Dahabshiil’s core business, but the company has diversified to offer financial services to international organisations, businesses and private individuals. Most of the major international development organisations operating in Somalia use Dahabshiil to transfer funds, including the UNUnited Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
, WHO, World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...
, Save the Children
Save the Children
Save the Children is an internationally active non-governmental organization that enforces children's rights, provides relief and helps support children in developing countries...
and Care International.
In 2008, Dahabshiil acquired a majority stake in SomTel, a Somaliland-based telecommunications firm specialising in high speed broadband, mobile internet, and mobile phone services. The acquisition provided Dahabshiil with the necessary platform for a subsequent expansion into mobile banking, a growth industry in the regional banking sector.
In early 2009, Dahabshiil opened an Islamic bank, Dahabshiil Bank International, in Djibouti
Djibouti
Djibouti , officially the Republic of Djibouti , is a country in the Horn of Africa. It is bordered by Eritrea in the north, Ethiopia in the west and south, and Somalia in the southeast. The remainder of the border is formed by the Red Sea and the Gulf of Aden at the east...
. An international bank, DBI provides services to business and private clients demanding Shariah-compliant financing. 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.
Community investment
Dahabshiil invests 5% of its annual profits in community projects aimed at improving schools, hospitals, agriculture and sanitation services. 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. After the tsunami of 20052004 Indian Ocean earthquake
The 2004 Indian Ocean earthquake was an undersea megathrust earthquake that occurred at 00:58:53 UTC on Sunday, December 26, 2004, with an epicentre off the west coast of Sumatra, Indonesia. The quake itself is known by the scientific community as the Sumatra-Andaman earthquake...
, the company helped provide immediate relief to the people in the regions of Somalia that were most affected. 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
Puntland
Puntland , officially the Puntland State of Somalia , is a region in northeastern Somalia, centered on Garowe in the Nugaal province. Its leaders declared the territory an autonomous state in 1998....
region of Somalia.
Compliance
Dahabshiil’s integrated services are managed according to strict international regulations to combat terrorismTerrorism
Terrorism is the systematic use of terror, especially as a means of coercion. In the international community, however, terrorism has no universally agreed, legally binding, criminal law definition...
, money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
and other illegal activities.
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.
In 2010, Dahabshiil became the first international payments firm to achieve authorisation from the UK Financial Services Authority
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
(FSA), under the Payment Services Regulations of that year which demand the highest standards of security, customer protection, transparency and speed of delivery.