The Central Bank of Kenya (CBK), has lifted its suspension of 13 Somali-run money transfer agencies whose services were halted on April 7 this year, following the killing of 148 students at Garissa University in Kenya by al-Shabaab terrorists.
Apart from the sanctions on the remittance firms, the bank accounts and assets of dozens of individuals, NGOs and travel companies were frozen as the Kenyan government attempted to clamp down on suspected sympathisers of al-Shabaab.
The suspensions were lifted this week on the orders of Kenyan President Uhuru Kenyatta who said his decision was based on detailed briefing on on-going investigations on the financing of terrorism.
“I have noted the proposal to lift the suspension of licenses for 13 registered Money Remittance Providers,” he said.
“In the light of this, I direct the Central Bank of Kenya to immediately issue comprehensive regulations that guide the operation of MRPs, upon which their suspension would be lifted.”
When the suspensions were announced in April, the Governor of the Central Bank of Somalia, Bashir Issa Ali, said the closure of the accounts would adversely affect Kenya’s Somali community of about one million.
“It’s going to hurt Somalis in Kenya more than Somalis in Somalia. The amount of money sent from abroad to Kenya is huge,” Ali told Reuters, pointing out that many Somalis in Kenya relied on relatives abroad for basic needs, including school fees.
Between $70 million and $100 million is estimated to be transferred to Kenya every month through informal money remittance methods, that involve transfer of cash without any records of parties involved in the transactions.
One of the companies that was affected by the CBK ban is Dahabshiil, Kenya.
It said in a statement: “The [Kenyan] authorities have carried out a comprehensive review of Dahabshiil Kenya’s operations, policies and practices.
“They are satisfied that the company complies fully with the law, and operates strict anti-money laundering and counter-terrorism financing practices.
“Going forward, Dahabshiil will now benefit from access to the Kenyan Ministry of Interior’s new Integrated Population Registration Services database, which the Ministry has introduced in order to facilitate local customer due diligence. This is an industry-wide directive.”
Abdirashid Duale, the Chief Executive Officer of Dahabshiil Group, which has networks in 126 countries, including the UK and the US, said: “We respect and comply with the laws of each and every country.
“Our services provide a vital lifeline for people to feed, educate and otherwise help their families and loved ones, and to run businesses, thus creating jobs.
“We are also pleased we can resume working with the many international organisations who use our services to support vital humanitarian and development programmes.
“Dahabshiil makes significant contributions to the Kenyan economy.
“It helps create hundreds of thousands of jobs, either by providing direct employment, or by enabling the transfer of investment funds, which creates more jobs, and further helps reduce poverty.
“Dahabshiil supports communities in the countries it serves, including Kenya.
“It invests 10 per cent of its profits in humanitarian and community regeneration projects, including building schools, hospitals, and providing safe drinking water.”
The company was founded in 1970 to enable East African migrants to send money to family and friends back home.
Now, Dahabshiil is the largest African money transfer business, operating in 126 countries across the world, 40 of which are in Africa.
The company said on its website that it remained “committed to its original values of trust, reliability, integrity and customer-focus”.
Dahabshiil also offers money transfer and banking services to businesses and international organizations, including the UN, World Bank, Oxfam and Save the Children.
“They rely on Dahabshiil to provide payment services to their staff, contractors, government institutions and partner NGOs,” the company said.
“The United Nations describes Dahabshiil’s services as ‘the only safe and efficient option to transfer funds to projects’”.