I was on my bike very early this morning to join a group of Somali campaigners who are calling on Barclays to keep open the cash lifeline to Somalia.
Every year Somali migrants send around $1.3 billion dollars to friends and families at home and over £100 million of this comes from the UK. This money simply dwarfs the amount of humanitarian aid governments send to the country and is vital for families in Somalia who rely on this income to cover basic costs like food, water, education and healthcare.
So it has obviously come as a serious blow to Somali communities in the UK to find that it will become more difficult and expensive for them to get money to their loved ones in the near future. As banks become increasingly risk averse due to counter-terrorism legislation, the accounts of money transfer organisations that transfer these funds to Somalia have been closed down. Organisations that send large volumes of money each month (above 3 million euro) need to have a bank account. Smaller organisations, transferring less money, don’t.
Two weeks ago Barclays closed all but one of the accounts of the larger organisations, with the remaining one currently seeking a court injunction to prevent the bank from shutting it down. Whilst at the moment small organisations can still process transactions, there is concern about the tightening environment and increased difficulty in sending money.
In response, campaigners got on the saddle of London’s famous ‘Boris bikes’ sponsored by Barclays to get the message to the bank that the most vulnerable should not be made to suffer while government, regulators and banks get a workable solution in place. They brought with them bags of fake cash to illustrate the money that will now be more difficult to send to those who urgently need it back home.
One of these campaigners is Farhan Hassan who says that the account closures mean that his 80 year old mother-in-law won’t get the money she relies on for things like food, rent and healthcare. Farhan started a petition that has the support of gold-winning Olympic champion Mo Farah and has garnered over 100,000 signatures.
The British Government has, at the last minute, announced a raft of measures to clarify regulation and respond to banks’ concerns. Banks must now take responsibility and keep accounts open so that ordinary Somalis do not suffer while these solutions are put in place. The money transfer sector should be creative and open about exploring new opportunities, including mobile money, and where there are alternatives, Government, the banks, and the sector should communicate transparently around these to ensure that everybody knows the options.
African Development Solutions (Adeso) who are working with Oxfam on this issue emphasise that the last thing anyone wants in Somalia is a deterioration of the humanitarian situation or a return to famine, simply because the UK government, the sector and the banks are unable to find a solution to solve the current perceived risk of working with money transfer organizations.
More on the Somali remittance crisis.