Mobile money transfer banned in Somalia

19 Oct 2010

Somali rebel group al-Shabab has imposed a ban on the mobile money transfer service known as ‘Zaad’, according to a report by Reuters. In a statement issued by the militant group, al-Shabab has ordered local telecoms companies to stop offering Zaad by 31 December 2010, stating the service poses a threat to the economy. The group claims that use of Somali shillings has declined in recent months. Al-Shabab also says that mobile banking could expose Somalia to interference by Western countries through the international partners of the Somali telecoms firms. Southern Sudan’s Hormuud Telecom, Golis Telecommunications in Somalia’s semi-autonomous region of Puntland and Telesom in the breakaway republic of Somaliland all offer Zaad, which allows customers to use their mobile handsets to transfer money, make purchases, pay bills and recharge airtime. In a country that has lacked an effective central government for almost two decades and where the banking sector remains underdeveloped, the Zaad service has become a popular means of moving money.