Paving the Way for a Cashless Society: Somaliland and Mobile Banking


There are no ATMs, the countries currency is unrecognized without an official exchange rate, and every American dollar translates into 17, 000 Somaliland Shillings. With all of this, Somaliland is on track to become a cashless society. Some may argue this is out of necessity and others argue it’s because of ingenuity; most likely it’s both.Somaliland, in the Horn of Africa, is an unrecognized state. After the collapse of the Somali Republic, the government decided to withdraw from the Union with Somalia and reinstated Somaliland’s sovereignty. With the lack of a strong banking infrastructure, many people in Somaliland rely on money-changers who have established self-built stacks of money, often transferred back and forth in wheelbarrows. Paper currency simply doesn’t work in the area.

What does work in the area however, is electronic banking. For some time now, remittances payments have been flowing electronically back and forth between Diasporas and the locals of Somaliland. The hawalad, also known as money transfer systems, allow people to electronically send dollars back and forth without the need for money-changers and banks. Emerging out of this phenomenon is a strong and growing mobile banking system with the potential to dissolve the cash economy all together.

The largest hawalad is Dahanbshiil. Somolilanders are able to withdraw American dollars within minutes of funds being deposited from any one of the companies 24, 000 worldwide agent locations – similar to Western Union in North America. Dahanbshiil also sends out an SMS notification to the recipient when the funds are clear and available.

Expanding on its years of successes, Dahabshiil released SomTel International, which became one of Somaliland’s leading mobile phone companies and internet operators. Shortly after it’s release SomTel rolled out electronic banking services. Capitalizing on its success and customer base, SomTel looks to bring affordable mobile phones and mobile banking to the country. Diaspora will continue to be able to send money via Dahabshiil, resulting in its mobile service recipients being able to by-pass banks and money-changers all together.  As the technology grows into the retail sector as well as the private sector and bill payment system, Somaliland, an unrecognized country with an unrecognized currency is on the fast track to becoming a leader in mobile banking as well as becoming a cashless society.

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About Caitlin Turner

Caitlin Turner is a graduate student at the Institute of Conflict Analysis and Resolution, George Mason University. Through her thesis work, Caitlin hopes to bring attention to the ways in which social media can promote sustainable peace, encourage mobilization and foster social change. The first time Caitlin truly became interested in conflict issues was at the University of Calgary where she obtained her BA in Urban Studies and developed an affinity for flash mobs and Robert Putnam. In recent years, she has carved out a niche as a blogger and hopes to carry this momentum forward bringing a unique voice to complex issues.