Somalia Warns of Disaster If Barclays Stops Money Transfers - International Business

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Somalia Warns of Disaster If Barclays Stops Money Transfers
In this article, the author discusses the awaiting disaster in Somalia if Barclays Bank stops money transfers. The country`s government has warned of the pending disaster if Barclays withdraws banking services from the country`s largest money transfer market. Approximately half of the Somalia population and the republic of Somaliland rely on money send by relatives and friends living overseas, most of which is used to pay for healthcare services and food. Due to the continued civil war in the country, the banking sector has been adversely affected and remittances sent to the country are worth about $1bn-$2bn annually. This amount even exceeds the official international aid.
Currently Barclays is the only major bank providing services to various companies in Somalia. If it stops providing accounts to some of the companies, the flow of funds is expected to fall dramatically. Barclays move is geared at ensuring appropriate checks and controls are in place to avoid money laundering. Other companies that can be used if Barclays terminates money transfers are too expensive to use and have fewer locations. Some of the Somali residents accuse American government of the various decisions taken by different banks because of the 9/11 terrorist attack that happened in America. If Barclays takes the move, the result will be poverty and increased rate of deaths in the country due to lack of food and healthcare services.
From this article, it is worth noting that the banking sector in any country needs to have a total support from the government it terms of security, and regulations that will prevent all sorts of money laundering. This will help the country to evade any adverse affects that result due to banks terminating money transfers. It will also help the country to establish a g...