Finance Conference

SOMALILAND BANKING AND FINANCE CONFERENCE

2019 REPORT www.somalilandbafc.com

“Promoting Banking and Financial Sector: Connecting People to Banking and Financial Services” Table of Contents Table ofContents Current SomalilandBanking&FinanceEnvironment D.Closing oftheConference Fighting FinancialCrimes: C. OtherPresentations B. A. Conference InputsandDiscussions The specificobjectives oftheconference were: Executive Summary Introduction /Background Appendices IV.Media Coverage andFeedback III.Conference Outcomes ..... 3. TheFintechrevolution 2.Access toInsuranceServices 1.Access toBankingServices Minster ofInvestment Promotion Minister ofTrade andTourism Industry Minister ofFinanceDevelopment The Governor ofCentralBank Opening oftheConference Plenary Sessions Plenary ��

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Background Somaliland is a Sub-Saharan country located in the Horn of Africa, sharing boundaries with the Gulf of Aden in the north, Somalia in the east, the Federal Republic of Ethiopia in the southwest, and the Republic of Djibouti in the northwest. It has a total surface area of about 176,119.2 square kilometres and a coastline, which is 850kilometers long. It lies between Latitudes 80 and 110 27’ North and Longitudes 420 35’ and 490 East and has mountain ranges rising up to 1800 and 2100 meters in the centre and in the east of the country respectively.

Somaliland gained independence from Britain on June 26th, 1960. On July 1st, 1960, the state of Somaliland united with Somalia, a territory under a U.N. mandated Italian Trusteeship until that same day, thereby creating the Somali Republic. The Republic of Somaliland restored its independence after the total collapse of Somalia on 18 May 1991 as a result of the civil war of the late eighties and early nineties.

Since the declaration of statehood Somaliland has managed to secure peace and stability for over 28 years after over a decade of civil war and state collapse. Whilst post-war reconstruction was difficult, Somaliland achieved notable successes of livestock exports, developing banking system,economic growth and government revenues mobilization, which increased strongly since independence. However, despite the progress that has been made, Somaliland still is one of the poorest countries in the world. Somaliland’s economy is highly dependent on livestock, but needs to be diversified. Although, Somaliland was ranked as 18th most peaceful state and 27th best democratic governance in Africa, it suffered from the lowest GDP per capita of $675 and its unemployment rate of 70% (PSA, 2017). In terms of ease of doing business, the country is ranked 174 out of 184 countries (World Bank, 2012). Accordingly; it has been moving from humanitarian, recovery, and reconstruction stages; and finally, toward relative development status.

Overall assessment indicates that the country has made notable developmental progress with most social and economic indicators showing slight improvement. However, the country continues to face a number of social and economic challenges, ranging from high levels of youth unemployment, issues relating to education, health, urbanizations, rural-urban migration, and the large unbanked or financially excluded population.

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The financial sector of Somaliland started with the establishment of the Bank of Somaliland as the central bank of the Republic of Somaliland, which was founded in 1994; The Bank’s mission is to promote the wellbeing of the people of the republic of Somaliland by maintaining monetary and financial stability. It is 100% owned by the Government of Somaliland but it is constitutional autonomous institution.

To promote the safety and soundness of the financial institutions, the Central Bank of Somaliland regulates and supervises both public and private sector 16 money transfer business, three licensed banks, 3 Insurance company, two Mobile money operators, two Micro finance institutions and over 360 foreign exchange dealers/ agents. In short this means working to prevent future financial crises or reduce their frequency and severity.

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Executive Summary

Bank of Somaliland (CBSL) together with the Ministry of Finance (MOF) organized the First Somaliland Banking and Finance Conference from 22-23 June, 2019 in Hargeisa, under the theme of “Promoting Banking and Financial Sector: Connecting People to Banking & Financial Service”.

The conference established itself as a unique platform for the exchange of knowledge and experience in the area of Banking, Insurance, Remittance, microfinance institutions, and Fintech companies, which brought together all participants in the financial industry. Over 200 participants attended, these included the government, Chamber of Commerce, Djibouti Consulate, Ethiopian Consulate, Turkey Consulate, Private Banks, Insurance companies, Remittances, Mobile Money Service Providers, Universities, UNDP, an International Organization, Civil Society Organizations, Cooperatives, Experts and SABA Bank In this event it was the for the first time an open discussion on these topics with the participation of financial institutions, state regulatory bodies and public organizations for consumer rights protection and industry experts became possible.

on the other side, There were three plenary sessions led by financial sector experts in Somaliland along with presentations and discussions by prominent academics, policy makers, bankers, private sector actors, opinion leaders, researchers and representatives from development organizations.

There was a parallel exhibition platform where financial institutions showcased products and services. This exhibition was also used as an outstanding deal making where local financial institutions engaged and evaluated promising investment opportunities. The exhibitors were from the banking, Insurance, remittances and fintech companies, and Micro-Finance from all over the country.

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The specific objectives of the conference were:

• To promote banking, and financial services in Somaliland

• To strengthen the collaboration between the Government and the Private Financial Institutions.

• To identify the current status of Financial Sector and to address key challenges in Ac- cess to Finance. • To create a platform in which the financial sector issues can be discussed and produce an effective decisions.

The outcome was a very positive feedback from both participants in the financial industry and the general public. The conference affirmed the importance of promoting financial services for Somaliland Economy and It concludes with the following ‘Call to Action’: - The swift implementation of Somaliland’s Financial Sector Development Strategy. That is aim to mainstream financial inclusion, products, literacy, and equity.

The central bank was lauded for its heroic undertaking of spearheading the facilitation of the legal framework and the regulatory laws needed for the financial institutions. At the conference, there was a unanimous acknowledgement and applaud for the strides the private financial institutions had made, and the continued need for them to play a positive driving force in the elimination of the financial obstacles and constrains that are hindering the potential and progress of Somaliland’s society.

In the conference generated the momentum to accelerate and support the development of Somaliland Financial services and putting in place the enabling environment.

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A. Conference Inputs and Discussions

Opening of the Conference

The President of the Republic: Master of the Ceremony

The President of the Republic of Somaliland, H.E. Muse Bihi Abdi officially opened Somaliland Banking & Finance Conference on June 22 2019. He acknowledged the concerted effort of the Central Bank and Ministry of Finance for hosting this historic conference, the financial institutions participated the country’s development from the infant stage of Somaliland and up to now. The president stated that his government will encourage the entrepreneurs and support their businesses to succeed. HE. Muse Bihi Abdi

The president noted that the economic outlook in Somaliland over the next decade will be driven by the service sector mainly financial services and he announced that his Government is willing to prepare the enabling environment as much as they can. He also mentioned that the unemployment rate in Somaliland is estimated 70%, which is very horrific, and indicated that it is a collective responsibility of both the government and the private sector to reduce the high unemployment rate. The president emphasis was the need to work collaboratively to invest the nation, create employment and explore our vest resource instead of relaying on importing from abroad. Creating successful business creates a better economy.

Finally, the president launched the ribbon cutting ceremony of the exhibition with the Central Bank Governor and the Minister of Finance as well.

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The Governor of Central Bank Ali Ibrahim Jama

The Governor of Central Bank welcomed the participants to explain the development of financial sector as well as the central bank. He expressed the high expectation of the conference recognizing this valuable opportunity. Mr. Ali Ibrahim mentioned the advantages of the use of Somaliland shillings and remarked that the recent appreciation of the Somaliland shilling was result of Central Bank’s tireless effort. He said “we want to encourage the use of Somaliland shilling on daily transactions and to save the $USD for external investment or trade”. Furthermore, the Governor highlighted some of the functions of Bank of Somaliland in order to create distinctions between roles of private banks vs. Central Bank. He stated that central bank is responsible for conducting monetary policy, supervision and regulation of financial institutions. Finally, the governor stated that central bank plays a crucial role ensuring economic and financial stability of the country. The governor declared that the central bank’s vision is to build and make a Somaliland the financial hub of the region with strong and prudent financial system.

Minister of Finance Development Sa’ad Ali Shire

Following the opening address, the minister of finance development outlined the background of the conference and presented the program. Mr. Shire who welcomed the participants and attendees to the second day of the conference gave welcome remarks, and stated the important role

the financial industry plays in the economic growth of the country. The minster highlighted some of the challenges facing financial institutions, and their customers including the shortage of saving. The minister encouraged the citizens and business entrepreneurs to save in order to increase our deposits so that our banks will be able to provide loans. The minster stressed the crucial role of financial institutions to the economic development. The minster thanked organizers of the event and highlighted that, second day focus will be on Fintech investment and insurance. He said. “I would also like to give a special attention to the guests from the private sector, whose presence is essential to the success of the conference.

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Minister of Trade Industry and Tourism Mohamoud Hassan Sa’ad

The minister of Trade, Industry and Tourism Emphazised the importance of this occasion for all business stakeholders because it allows to draw the attention of policy makers and the public yet again to one of the major source of funds which is our financial institutions.

The minister stressed the need for financial institutions help to channel their funds to the most successful businesses and the ideas of the young entrepreneurs, which allows them to grow faster and supply even more of the desirable goods and services. This is how financial institutions greatly contribute to the efficient allocation of economic resources. He stressed the need for access to loans and how it can improve the creativity of our entrepreneurship.

Minster of Investment Promotion Mohamed Ahmed Awed

Following the opening address, the minster of investment promotion outlined that the investment and trade are key drivers of economic growth, it helps millions of people to escape poverty, secondly stimulate creativity and promote prosperous sustainable development.

Finally this will strengthen international cooperation, and mutual exchange between countries. He stressed the importance of investment in Somaliland and the opportunities that exist like untapped resources especially livestock, oil, gas mineral, fishing and farming. The minister also remarked the Somaliland economy is growing and is built on strong trading relationship with the world as well as favorable investment policies which will attract many investors contributing to our dynamic private sector and the government is committed to improve further the economic and investment environment so to ease the process of investing in Somaliland and facilitating further trade and prosperity.

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B. Plenary Sessions

1. Access to Banking Services 1.1. Presentation

Topic: Overview of Financial Sector in the Republic of Somaliland

The Director General opened his presentation by commending the organizing team for bringing together the key actors and other stakeholder. The DG highlighted some functions of Bank of Somaliland in order to create distinctions between roles of private banks and the Central Bank. The Director General stated that Central Bank was established in Mr. Ahmed Hassan Arwo DG - Central Bank 1994 through an Act of Parliament, the Bank of Somaliland Act 1994. The Act 1994 was replaced by new Central Bank Act No 54/2012, which was signed by the President on 12 April 2012. Article 4 of the Bank of Somaliland Act 2012, gives the bank the mandate to carry out the following strategic objectives:

• To achieve and to maintain domestic price stability. • To foster the liquidity, solvency and proper functioning of a stable market based financial system. • To promote a safe, sound and efficient national payment system. • To support the general economic policies of the Government of Somaliland, and contribute to a sustainable economic growth.

Conference Report 12 Somaliland banking & Finance Conference www.somalilandbafc.com 1.2. Panel discussion on Banking Services

Moderator: Mr. Saeed A. Saeed Managing Director, Waayeel Consulting Ltd Panelists: Mahamud Yusuf, Abdirahman Muse, CFO, Premier Bank Director of Financial Institutions Khalid M. Yassin, Supervision, Central Bank of Somaliland Operations Manager, Dara -Salam Bank Abdihakim Mohamed, Amina Arshe, COO, Dahabshiil Bank International Business-woman Adam Ismail, Economist

Introduction

The presentation by the Director General of the Central Bank were followed by a panel discussion that addressed the topic of “Promoting banking: Connecting people to Banking Services”. The

The First Panelist

Mahamud Yusuf, CFO, Premier Bank Mr Mahmud from Premier bank began the panel began discussions with the difference between conventional banking and Islamic banking. The product and services that the local banks currently offer that are Sharia compliant. He also clarified that Islamic banks are subject to follow the Shari’ah rulings provided by their shariah committees.

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following are key points from the panelists: The Second Panelist

Khalid M. Yassin, Operations Manager, Dara -Salam Bank Mr Khalid started with addressing the key products DaraSalam Bank offers to its customers, such as electronic banking services including swift transfers, in the banking industry. After many questions have been raised about the high rates, Mr Khalid agreed with Mr Abdihakim’s comments, that banks offer lower rates compared to the regional banks like Kenya. For instance, in Kenya, lending rate in Kenya is around 13% – 14%, but here in Somaliland if a bank finance a three years project, the rate will be around 7% - 8%.

The Third Panelist

Abdihakim Mohamed, Deputy CEO, Dahabshiil Bank International Mr Abdihakim from Dahabshil Bank International has explained the history of Banking and financial services in the country. He expressed the products and services offer by the bank including LC or letter of credit, saving and current accounts (Both in USD and SLSH). He added that, all these products are available in the modern payment channels like mobile banking which increases access to finance and more convenient. For instance, a customer can open current/saving account in DBI (both USD and SLSH) and deposit some amount of money to use it as he wishes via mobile money. Abdihakim has addressed that, in 2014 Micro Dahab was established since there was a huge demand for financing the Small medium enterprises, the terms and conditions is compatible with their capacity to pay back.

The forth panelist

Mr Abdirahman Muse, Director of Financial institutions Supervision Department Mr Abdirahman from Central bank explained the role of Central bank to create an enabling environment for private banks and financial sector development, by reviewing, drafting, redrafting or amending the enabling legal framework. He added that, the bank amended central bank act and Islamic bank act to bring them up to global standards while making them more responsive to local needs. He also explain the bank’s strategy to overcome the issue of access to finance. Finally he made some comments about Somaliland’s Saving Culture and said “In order to cultivate a saving culture, Central Bank of Somaliland has been discussing on how to promote investment accounts in Islamic banking deposits which also increases access to finance.

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The Fifth Panelist,

Amina Arshe, Business woman and Director of Fisheries sector of the Chamber of Commerce, Ms Amina Arshe highlighted some of the challenges that are preventing individuals from seeking loans from banks. For example High profit rates for loans hinder entrepreneurship. Often loan seekers are also requested to pay back loans on a short period of time. She encouraged banks to lower their profit rates and give loan seekers a longer payback period to allow businesses to grow and have a chance for success. She also stressed the need for government to open the doors and ease opportunities for foreign investment in the country. Countries such as Malaysia, India and Turkey which have expressed great interest in investment opportunities in Somaliland. Amina mentioned that local banks also need to offer personal loans; to purchase houses and cars, address personal needs, etc. She concluded he discussion “most business loans are in private small businesses that are product or service based. However there an immense need to invest in agriculture and farming again to revive that sector. Majority of our economy is tied to informal private sector (over 90%).

The Final Panelist

Mr Adam Ismail (Phd), Economist and Independent Researcher Mr Adam opened his discussion by commending the organizing team from both the Central bank and Ministry of Finance for bringing together the key actors and other stakeholders. Studies were shared by Mr Adam that showcased the challenges facing SMEs; • Overwhelming number, 82%, said primary issue being access to finance; • Approval rate for loans are very low. Those small margins that are approved loans face very strict stipulations and restrictions; and • Banks fees and rates are very high Mr Adam added that, some of the practices of Banks that claim to be Sharia complaint are that of conventional banking and do not adhere to Sharia laws. As such, it’s important to have regulations and compliance monitoring entity in place to ensure that banks are indeed Sharia compliant. He concluded the providing some solutions, the first solution for this is for the country to establish banking regulations and legal frameworks that protect the banks and consumers alike and secondly, the Central Bank needs to encourage consumers to save by providing them with incentives, such as rates of returns on investment accounts. In addition, the Central Bank needs to promote financial inclusion through financial education.

Conference Report 15 Somaliland banking & Finance Conference www.somalilandbafc.com 2. Access to Insurance Services

The second session was comprised from Moderator: Mr. Saeed A. Saeed the regulator, insurance companies and the Managing Director, Waayeel Consulting Ltd traders and the main issues discussed were: Panelists: - Mowlid Farah FIU Director Somaliland Central Bank The first panellist: - Liban Public Relations, Takaful Insurance of Horn of Africa insurance representative Africa Abdisalan Hassan - Abdirahman Ahmed CEO , SomTakaful - Gave thanks to the central bank and the - Adam Abbi ministry of finance for putting together the President, Horn of Africa Insurance conference, stating how important it is for the socio-economic development of the country. - Hibo Expert, Insurance Field

• The insurance services provided by the company include: - health insurance, immovable property insurance, travel insurance and insurance of goods in transit. They also provide re-insurance services which is deemed important by bigger companies. • These services are provided on an international scale for the client’s living outside the country. • He mentioned that most of the society doesn’t really know what insurance is and how beneficial it could be, which leads to a lot of economic problems to remain unsolved. He mentioned a case where a cargo ship capsized, where the damages procured were estimated to be around 5 million dollars, and that the recovery of the damages would have been easier if the goods were insured. • He also advised that the government and the insurance firms join hands to raise inform, teach and raise awareness among the civil society about insurance and the benefits of it.

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The Second Panellist:

Liban Mohamed The Public Relations director from Takaful Insurance of Africa

• Liban mentioned that Takaful insurance was the first insurance company to be launched in Somaliland, especially Islamic insurance. In his opening statement he said that insurance is one of the hardest services to be provided for the public, and they had been actively functioning in several regions in Somaliland for the past five years and in neighbouring countries as well. They also provide several different insurance services including but not limited; health insurance, family insurance, one for health officers\medical practitioners and one for the patients. • They also provide motor/vehicle insurance, general policy for both the insure and third party damages, and reimbursement for third party damage acquisition. • Goods in transit insurance and travel insurance were also some of the packages mentioned. • Liban also stated that there is a need for collaboration amongst the companies to raise the awareness amongst the society and inform of the importance. He states that the central bank is a key player in this collaboration, because they are responsible for the creation of the guidelines and instruction manuals for the insurance companies to function effectively. He also pointed out that insurance could take an important role on the healthy development of the economy and it would increase the financial security of all the other faces of life.

The Third Panellist: Abdirahman Ahmed CEO, from Somtakaful Insurance

• After greetings, Abdirahman stated that somtakaful provide Islamic insurance, that there are over 250 takaful branches over the world, 41 of those in Africa. There are 4 different insurance companies currently operating in Somaliland he said. He mentioned Somtakaful contracts are solely based on the Sharia guidelines and that they are the first company to acquire their license from the central bank of Somaliland. • Their services include, health insurance, goods in transit insurance and vehicle insurance.

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The Forth Panellist: Mawlid Farah Director of Financial Intelligence Unit, Central Bank

• He stated that the central bank is the regulatory authority for different Financial Institutions. He also mentioned that all the insurance companies have been registered for the last 5 years, even though they acquired their licenses at different times. • There are now three insurance companies that are registered and do have their licences, following the guidelines drafted by the central bank, stating the proper procedures, regulations and so on. • The central bank also drafted the “Takaful Insurance law”, sharing it with the insurance companies and businesses. They’re hoping to start working on the second draft in the upcoming two/three months and bring it to council of ministries and then to the parliament. • He also stated that the companies are regulated, with constant inspections on their work systems, whether they are implementing sound financial systems, which are carried out by the supervision unit at the central bank of Somaliland. • He mentioned that the central bank but in place a development plan for insurance sector. This plan will result the approval of Takaful insurance, also this will create the atmosphere of competition, training environment and infomercials for the society regarding insurance to increase risk management. • He also stated that they should hold conferences like this for individuals and businesses so that they could pick up ways to protect their wealth by risk mitigation.

The Fifth Panellist: Hibo Warsame Insurance Expert

• She states how important it is to hold conferences like this to discuss financial security. She also mentions one of the most important insurance benefits that we are currently missing which is risk mitigation that the recovery from damages doesn’t only fall onto one party. But because of our customs and family traditions most people can rely on them. But for those who don’t have these particular relations, or enough monetary security it could get very difficult for them. • She mentioned that insurance packages and paying premiums could help individuals bounce back from disasters/accidents without losing their way of life. • She also mentioned the importance of raising awareness and informing the community about the true nature of insurance. • It could also help us further our economic interests she said, where the premiums paid could be put into use through investments and so on.

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3. The Fintech revolution

Over the past few years, fintech — the confluence of financial services, technology, and the law — has created a boom that has played a significant role in reshaping customer expectations and demand for convenient and less expensive access to financial products and services, providing new opportunities for investors while driving innovation into virtual banking, cloud- based lending, and all forms of digital payment

3.1. Presentation

Topic: From Unbanked to Digital Financial Inclusion: “The Case of Somaliland” - Abdirahman Adan Shire

Mr. Shire presented that 52% of the population in Somaliland are financially included, mainly using the digital mobile financial services, and accounts provided by Somaliland financial institutions, and telecommunication companies. This figure is much bigger than that of sub-Saharan African countries, which the data indicates that 42.6% of the population have accounts i.e. financially included. Shire recommended that following steps to be taken for further improvement of the fintech industry Private Sector to invest further Innovations on Digital Financial Services. Government to create National Strategies & Policies that will accelerate Financial Inclusion. Minimizing the unbanked sectors by focusing on rural communities and women. Universities / Academics to research the opportunities offered by Digital Financial inclusion

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Unbanked Globally 1.7 billion adults lack an account Adults without an account, 2017

People that do not have access to financial services and rely on inconvenient and often risky means to manage their money.

Financial Inclusion - Global Mandate

“Financial inclusion is positioned prominently as an enabler of other developmental goals in the 2030 Sustainable Development Goals” - UNCDF

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3.2. Fintech Panel Discussion Moderator: Mohamed Awale

Panelists: The panel discussed the important Mohamed Abdillahi role that FinTech plays in the economic Director, Monetary Policy Unit, Somaliland development of Somaliland. Central Bank

Eng. Ali Omar Business Development Manager The first panellist: Telesom Group Abdirashed M. Ismail CEO, SAHAL Tech

Fu”aad Ahmed Nuh Manager, EDahab Service, Dahabshiil Group Ahmed Tani Country Director, World Remit Mr. Ahmed Tani

Mr. Ahmed Tani from the World Remit indicated that the current technology allowed the remittance companies of Somaliland to move from the traditional methods of doing their businesses to the use of digital payment systems including the mobile and web based platforms which reduced the transaction costs and facilitated the easy transfer of money in and out of the country and finally increased the financial inclusion particularly women.

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The Second panellist: Fu”aad Ahmed Nuh

Mr. Fuad Nuh of E-DAHAB Service addressed that 3.4% economic growth of Somaliland as reported by the World Bank in August 2018 was mainly due to the remittance funds from the Somaliland diaspora and other funds exchanged via the digital payment platforms mainly, the mobile money financial services, and this makes the necessities the development of financial service technology. The key challenges are lack of widely used national identity cards, regulation and financial services conflict resolution mechanisms, interoperability of the different providers are also missing. For opportunities the fintech increased access to finance.

The Third panellist: Eng. Ali Omar

Eng. Ali of Telesom ZAAD Service expressed that over 50% of the population in Somaliland have mobile money accounts and thus financially included. The mobile money financial services in Somaliland facilitated the transfer of humanitarian aid (in cash) to the much-needed people in remote areas. He emphasized that Somaliland is a pioneer when it comes to the mobile money financial service provision. He indicated that the key challenges of the industry are literacy, regulation, and connectivity of the industry

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The Forth panellist: Mohamed Abdillahi

Mr. Mohamed Abdillahi from the Central Bank of Somaliland emphasized that as a regulatory body of the industry, the central bank has created an enabling environment for developing the financial services technology to increase the financial inclusion and that the Bank has put in place the basic regulatory requirements for mitigating all risks associated with the use of financial technology.

The Fifth panellist: Abdirashed M. Ismail

Mr. Abdirashid from SAHAL, a fintech company in Somaliland has explained that electronic financial services has a great impact in terms of doing businesses by increasing access to finance, reduction of transaction costs and improving the service delivery to meet the customer expectations. Abdirashid recommended strengthening the regulation of industry to cope up with its fast growing pace

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The Role of Mobile in accelerating financial inclusion

Mobile money has boosted accountownership in parts of Sub-Saharan Africa Adults with an account (%)

Impact of Digital Finance

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C. Other Presentations

Topic: Fighting Financial Crimes: The Case of Somaliland

In the first place Mr. Obsie explained the general concepts of financial crimes. He clearly explains the concepts of money laundering, corruption, tax evasion, financial abuse and financial crimes and the ways they involve and the operational implications to the Banks and other financial institutions. Obsie presented financial abuse has the broadest meaning, encompassing not only illegal activities that may harm financial systems, but also other activities that exploit the tax and regulatory frameworks. He explains Abdirahman Obsie when financial abuse involves financial institutions Chief Compliance Officer (or financial markets), it is sometimes referred to as Dahabshiil Group financial sector abuse and money laundering refers to activities involving the processing of criminal proceeds to disguise their association with criminal activities.

Financial system abuse may have other negative macroeconomic consequences. For example, it could compromise bank soundness with potentially large fiscal liabilities, lessen the ability to attract foreign investment and increase /the volatility of capital flows and exchange rates. The local Banks and other financial business have but in place Know Your Customer (KYC) measures. Most of Financial Institutions had their own AML/CFT policies in order to support more financial transparency. On the other hand he mentioned the risks of anti-money laundering in the financial institutions is high comparing to other neighbouring countries.

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Finally; The presenter suggested the following recommendations in order Somaliland government to fight against anti-money laundering and combat terrorist financing:

Establish strong Regulatory frameworks those are inline with the International Standards.

To strength the supervisory role of Somaliland Central Bank in terms of AML/CFT along

basing the Anti money laundering and counter terrorist financing act.

To give high-level training to law enforcement agencies like police, office of attorney

general and courts.

To strength the AML/CFT policies and regulations of Private financial institutions, Public

Financial Institutions and Non Financial Institutions.

Increasing Public Awareness on AML/CFT laws and policies.

Somaliland government to participate the regional and other international initiatives

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D. Closing of the Conference

The Governor of Bank of Somaliland Mr. Ali Ibrahim Jama (Baqdaadi), Thanked attendees and conference participants on their participations and meaningful discussions and dialogues on “how to promote banking and financial services”. He then presented the communiqué of the conference as follows:

Communique:

Promote a conducive interoperable environment that is palatable to all the financial 1 institutions in Somaliland, where a genuine dialogue and exchange of ideas can occur and can best be leveraged and aligned with the national economic development agenda in order for Somaliland to reap a greater economic dividend. The aim being to build, and develop an innovative partnership of all the financial institutions in the country for the support and empowerment of the national economy.

The swift implementation of Somaliland’s Financial Sector Development Strategy was 2 called for, in an effort for modern financial institutions that are in compliance and in harmony with regulations and forward-looking financial policies can take a foothold in Somaliland.

Banks and financial institutions should play a more holistic focal role in the country’s 3 economic development by offering wider financial provisions that aim to mainstream financial inclusion and equity by remaining receptive to the socio-economic-ills and incorporating concrete solutions to the plight of youth unemployment, the difficulties and financial constraints faced by the SMEs, along with the limited gender related financial services that continue to hinder the participation and access of women in Somaliland’s marketplace.

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The importance of the public’s need to fully understand and comprehend the financial 4 services that the banking and financial institutions provide was agreed upon, and the need for a more coordinated and concerted public awareness efforts to increase the visibility and literacy of financial products further enhancing consumer confidence and increasing the public’s participation and utilization of the financial services in the formal banking and financial institutions

The central bank was lauded for its heroic undertaking of spearheading the facilitation 5 of the legal framework and the regulatory laws needed for the financial institutions, and the bank was further urged to expedite any outstanding legal measures the bank is currently working on in order to hasten a stable financial sector in the country that is based on a supportive financial infrastructure that is dynamically inclusive and in compliance with the sovereign rules and regulations of Somaliland.

At the conference, Somaliland’s unrelenting commitment to draw international banks 6 into the country was emphasized, and the importance the international banks have with their financial-wherewithal and depth to mobilize resources for local investment and help spur GDP growth, with the additional capability to help ease and harness the integration of Somaliland with the international financial markets.

At the conference, there was a unanimous acknowledgement and applaud for the 7 strides the private financial institutions had made, and the continued need for them to play a positive driving force in the elimination of the financial obstacles and constrains that are hindering the potential and progress of Somaliland’s society.

To build on the gains and the achievements of the conference, there was a consen- 8 sus among the joint organizers and the stakeholders to hold the conference on an annual basis, given the nascent state of the financial institutions and the regulatory bodies in Somaliland.

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Current Somaliland Banking & Finance Environment Banking & Financial Sector Players

Digital Payments Ecosystem

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III. Conference Outcomes

Preamble

We, the participants at the SLBAFC, co-organized by the Central Bank of Somaliland and Ministry of Finance (Hargeisa, 22–23 June 2019) declare as follows:

We recognize that it is important to establish an environment that is palatable to all the financial institutions in Somaliland, where a genuine dialogue and exchange of ideas can occur and can best be leveraged and aligned with the national economic development agenda in order for Somaliland to reap a greater economic dividend. The aim being is to build, and develop an innovative partnership of all the financial institutions in the country, for the support, and empowerment of the national economy.

We affirm that the Financial Sector Development Strategy is very momentous to develop urgently in order to shed light on a strategic areas in which can be improved and envisaged by the financial sector.

We recognize that the Banks and financial institutions can play a more holistic focal role in the country’s economic development by offering wider financial provisions that aim to mainstream financial inclusion and equity by remaining receptive to the socio-economic-ills and incorporating concrete solutions to the plight of youth unemployment, the difficulties and financial constraints faced by the SMEs, along with the limited gender related financial services that continue to hinder the participation and access of women in Somaliland’s marketplace

We envision that It is important for us to improve the financial literacy of the community, which promotes access to financial services. therefore, mobilization of financial services on the society should be increased.

We recognize that the Somaliland is willing to draw international banks into the country, and the importance of the international banks to mobilize resources for local investment and help spur GDP growth, with the additional capability to help ease and harness the integration of Somaliland with the international financial markets.

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We accept that the central bank is to facilitate the legal framework and the regulatory laws needed for the financial institutions, and the bank was further urged to expedite any outstanding legal measures the bank is currently working on in order to hasten a stable financial sector in the country that is based on a supportive financial infrastructure that is dynamically inclusive and in compliance with the sovereign rules and regulations of Somaliland.

We acknowledge that the private financial institutions had made a relentless effort from beginning up to now, and the continued need for them to play a positive- driving-force in the elimination of the financial obstacles and constrains that are hindering the potential and progress of Somaliland’s society.

We accept that the conference will be held on annual basis in order to sustain the continuous improvement on the financial institutions and the regulatory bodies as well.

IV. Media Coverage and Feedback

A. Media Coverage

There has been massive and positive coverage of the Somaliland Banking and Finance Conference in media outlets around the region. Many international, regional and national media organizations and agencies actively reported the outcomes of the conference within their network. Furthermore, participants provided positive feedback to Central Bank of Somaliland and the Ministry of Finance on the conference, which showed high expectations for the implementation of the conference outcome.

B. Feedback from the participants

The Conference adopted a communiqué to formulate the first Somaliland financial sector development strategy that will be co-led by the Central Bank and Ministry of Finance. Moreover, prominence participants have been convened and commented on the conference; hence their quotes have been summarized in here.

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Mohamoud Hassan Saad “Saajin” - Somaliland Minister of Trade, Industry & Tourism

Describing the conference as a ‘great historical moment and a big congratulations to Central Bank and the Ministry of Finance for a great & successful conference held in Hargeisa to promote financial sector. We wish you will continuously lead the role to promote Somaliland financial sector.”

Emad Qaseem -Director of Saba African Bank “I think we all gained a lot from this conference, and certainly meeting so many people in the same field as was the most valuable outcome...The event provided many opportunities to exchange ideas and network with Somaliland financial institutions.”

Dr. Saeed Ali Shire -CEO Amal Bank, Somalia “I am so grateful for attending the conference that enriches our knowledge and exchange unique experiences in short time. Especially we would like to apply this system in Somalia.”

Dr. Adam - Managing Director, Scotra Consulting

“It has been a pleasure to share this experience of joint work. Hope we can continue working together looking for a better financial service for all.”

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Appendices

A. Conference Agenda

Time Details

8:00 AM - 8:30 AM Registration

8:30 AM - 8:38 AM Opening Remarks: Recent Developments in Banking and

Finance Sector

Speaker: Mr Ali Ibraahim Jama, The Governor

8:39 AM - 8:44 AM Somaliland Chamber of Commerce - Jamal Aided Ibrahim

8:45 AM - 8:50 AM Telesom Group – Abdikarim Mohamed Eid

8:51 AM - 8:56 AM Dahabshil Group – Abdirashid Mohamed Said Duale

8:57 AM - 9:02 AM Takaful insurance – Omar Haji Husien Omar

9:03 AM - 9:08 AM Premier Bank Ltd – Nuradiin Abdi Elmi

9:09 AM - 9:14 AM SomTakaful Insurance—Abdirahman Ahmed Osman

9:15 AM - 9:20 AM Amal Bank - Dr. Saeed Ali Shari

9:21 AM - 9:50 AM The Role of Financial Sector in Country’s Economic

Development

Speaker: Dr Sa’ad Ali Shire, Minister of Finance

9: 51 AM - 10:05 AM Official Opening: His Excellence, Muse Bihi Abdi, The President

10:06 AM - 10:16AM Exhibition Hall Visit by H.E. Mr President

10:17 AM - 10: 32 AM Refreshment Break: Exhibition and Networking

10:33 AM - 10:38 AM Overview of Financial Services Sector in Somaliland

Speaker: Director General of Central Bank - Ahmed H. Arwo

10:39 AM - 12:00 AM Morning Panel Discussion: Access to Banking Services Panel-

ists:

• Abdihakem Ismail, COO, Dahabshil Bank International

• Mohamoud Yousuf, CFO, Premier Bank.

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Time Details

10:39 AM - 12:00 AM • Khalid Mohamed Yasin, Operations Manager, DaraSalam Bank

• Abdirahman Muse, Supervision Director,

Central Bank of Somaliland.

Dr. Adam Ismail, Economics and Independent Researcher

Moderator: Said Abdilahi Sa’id

12:00 PM - 2:00 PM Lunch & Prayer

Day Two (June 23rd 2019)

8:00 AM - 8:30 AM Registration

8:30 AM - 8:35 AM Speaker: Dr Sa’ad Ali Shire, Minister of Finance

8:36 AM - 9:36 AM Morning Panel Discussion: Access to Insurance Services Panelists:

• Liban Mohamed Esse, Marketting Manager, Takaful Insurance of

Africa

• Abdirahman Ahmed, CEO, SomTakaful Insurance

• Mu’aad Ali Ahmed, Marketing Manger, Horn of Africa Insurance

• Hibo Warsame Insurance Expert

• Mowlid Farah, Director of Financial Intelligence Unit, Central Bank

of Somaliland

Moderator: Said Abdilahi Sa’id

9:37 AM - 9:46 AM Fighting Financial crime: the case of Somaliland

Speaker: Abdirahman Ahmed Obsiiye

9:47 AM - 10:02 AM Refreshment Break: Exhibition and Networking

10:03 AM - 10:08 AM From unbanked to Financial Technology: The Case of Somaliland

Speaker: Abdirahman Ali Shire

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Time Details

10:09 AM - 11:25 AM Panel Discussion: The Fintech revolution:

Panelists:

• Omar Ali , Business Development Manager, Telesom Group

• Fuad Nuh, Director of Digital Payments, Dahabshiil Group

• Ahmed Tani, Country Director, World Remit

• Abdirashid, CEO, Sahal Company

• Mohamed Abdillahi, Director, Monetary Policy Unit of Central Bank

of Somaliland.

Moderator: Mohamed Mohamoud Awale

11:46 PM - 12:00 PM Communique and closing of the conference

presented by : Ali Ibrahim Jama, Governor of Central Bank

12:01 PM - 12:30 PM Gold Sponsors awards, Closing Remarks with Appreciation Awards

Speaker:Vice President: H.E. Abdirahman Abddillahi Ismail Saylici

12:30 PM - 2:00 PM Lunch & Prayer

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Somaliland Banking & Finance Conference

Central Bank of Somaliland