Somalis Unable to Send Money Home from US 2015-02-16

Somalis in the United States are now unable to send money back to Somalia. The final American bank that allowed for sending money there has stopped doing so.

The small Merchants Bank of California was the last bank in the United States that worked with Somali-American transfer companies. The Somali-American companies operate in the same way as the worldwide money transfer companies Western Union and MoneyGram. But they permit people to send money to rural areas of Somalia far from cities and towns.

Last week, however, Merchants Bank stopped helping the companies send money to Somalia.

Anti-terror legislation had stopped most American banks from giving people a way to send money to Somalia. Experts say more than a million Somalis cannot feed themselves. Many Somalis depend on the money sent to them by their friends and family members in the United States and other countries to survive.

Sunrise Community Bank in the U.S. and Barclays Bank in Britain have also closed their Somali transfer accounts. They were worried that the transfer companies were either working directly with terrorists or that the money being sent to Somalia was being given to terrorists.

The United Nations and humanitarian workers warn that Merchants Bank's decision will hurt Somalia. The money-transfer business there is huge. The United Nations and aid groups in Somalia use money transfers to pay their workers and to pay for projects in small villages and towns.

Aid groups such as Oxfam and Adeso, a non-governmental organization, estimate that Somalis living outside the country send more than $1 billion home every year.

Degan Ali leads the aid group Adeso. She says banks should continue to work with the money-transfer companies.

"We need an immediate solution and what we propose is that there be an exception to the case of Somalia because it's the only country that has experienced two famines in modern history. It's a country where there's this active conflict and people are highly food-insecure."

Somalia's government collapsed in 1991. Since then, hundreds of thousands of Somalis have been able to eat only because people living outside the country sent them money.

Oxfam said in a statement that it has warned officials for the past few years about the severe effect on the country of banks refusing to work with the companies. It also said the end of the transfers will worsen Somalia's humanitarian crisis.

An Oxfam spokesman told the Los Angeles Times newspaper that criminal gangs will now become involved with sending money into Somalia.

Sahal Hassan is a Somali man living in Nairobi, Kenya. He says the U.S. government should help Somalia create a legal financial system.

He says America helps Somalia, so how they can stop our only source of money? He says it is going to have an effect on us. If America has pressured banks to close the accounts of the money transfer services, it should help Somalia create a banking system and reform money wire transfer companies. He says America should not leave us hungry and suffering.

Ms. Ali of Adeso says Somalia should be given more time to improve its financial system.

"For now, the immediate temporary solution, let's give Somalia an exception to these rules so that the banks feel more comfortable as we strengthen the, the central banks in Somalia."

The Somali government has been busy fighting the militant group al-Shabab and dealing with fighting among political parties. Experts say the government must also work to strengthen the Somali banking system, rebuild the economy, and help end suffering in one of the most corrupt and poorest countries on Earth.

I'm Christopher Cruise.

Correspondent Mohammed Yusuf reported this story from Nairobi. Christopher Cruise wrote the story for VOA Learning English. Ashley Thompson was the editor.

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Words in This Story

transfer v. to move data or money from one place to another electronically

account(s) n. an arrangement in which a bank keeps a record of the money that a person puts in and takes out of the bank

propose v. to suggest (something, such as a plan or theory) to a person or group of people to consider

exception n. a case where a rule does not apply

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