Kenya to unban Somalia-linked money transfer firms

Remittances to Somalia from around the world are estimated to be worth around $1.6bn a year

bbc

 Kenya’s President Uhuru Kenyatta has said that money transfer firms will be unbanned, once the central bank unveils new guidelines for their activities.

He made the pledge in a Ramadan message to Muslims, who have been worst affected by the ban.

The government shut 13 Somalia-linked firms in April, saying it wanted to prevent militant Islamists from using them to finance attacks.

Kenyans Somalis accused the government of blanket punishment.

Somalis around the world rely heavily on the firms to do business and send cash to relatives in Somalia, where the banking sector is almost non-existent.

Mr Kenyatta, in his message to mark the Islamic holy month, said he had noted proposals to lift the ban on the firms.

He had therefore directed the central bank to “immediately issue comprehensive regulations” for the activities of the firms, “upon which their suspension would be lifted”.

‘Feeding families’

The ban was imposed after Somali militant Islamist group al-Shabab killed 148 people in an attack on Garissa University College in north-eastern Kenya.

There has been a similar crackdown on the companies in the UK and US where the governments have adopted strict money-laundering laws making it difficult for banks to deal with them.

The United Nations estimates that Somalis in the diaspora, almost all of whom are Muslim, send home about $1.6bn (£1.1bn) annually, significantly more than foreign aid.

More than 40% of Somalis receive remittances, the bulk of which are used for basic needs, including food, clothes, medicine and education, according to a UN survey.

Somalia has not had a functioning government since the fall of Siad Barre’s government in 1991, and has been beset by religious and clan conflicts.

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