Somali migrants around the world send approximately $1.3bn each year to friends and families at home – more than total humanitarian aid to Somalia. Of these remittances, more than £100m million comes from the United Kingdom.
This briefing shows how banks and regulators are in danger of inadvertently undermining this lifeline and driving it underground, as the interpretation of legislation on money laundering and counter terrorism becomes tighter in UK and USA, and banks become more risk-averse. Plans by Barclays to close all UK Somali Money Transfer Operators (MTOs) will have an effect beyond the UK, as many MTOs based in Europe route money to Somalia through the UK.
Somalia currently has no formal banking sector, and this corridor is the only official means of getting money into the country.
See also Keeping the Lifeline Open: Remittances and markets in Somalia