Xinhua, Nairobi :
A Kenya-based relief agency on Friday called on a US bank not to close money transfers to Somalia, saying the move threatens Somalia’s lifeline.
The African Development Solutions (Adeso), a charity and development agency, said thousands of families across the Horn of Africa nation are under threat due to the recently announced closures of money transfer by the Merchants Bank of California.
“Remittances form the backbone of Somalia’ economy. Unfortunately, this decision comes at a time when nearly three quarters of a million Somalis are facing acute food insecurity,” said Adeso Executive Director Degan Ali.
“We are likely to see that number (food insecure) rise if money transfer companies cannot remit funds from the United States to Somalia,” Ali added.
Each year, Somalis living abroad send approximately 1.3 billion U.S. dollars back to Somalia in an incredible show of solidarity to help friends and relatives meet their immediate needs.
These remittance payments also help supports numerous businesses and represent more than all foreign aid and investment in Somalia combined. Experts estimate that over 200 million dollars is at stake with this decision.
Merchants Bank of California on Jan. 27 informed Somali- American money transfer operators (MTOs) that it would discontinue their relationship from Feb. 6, citing business complexity.
According to Adeso, if the account closures proceed as scheduled, between 60 to 80 percent of U.S. remittances to Somalia could be affected, and some companies will be forced out of business immediately.
A Kenya-based relief agency on Friday called on a US bank not to close money transfers to Somalia, saying the move threatens Somalia’s lifeline.
The African Development Solutions (Adeso), a charity and development agency, said thousands of families across the Horn of Africa nation are under threat due to the recently announced closures of money transfer by the Merchants Bank of California.
“Remittances form the backbone of Somalia’ economy. Unfortunately, this decision comes at a time when nearly three quarters of a million Somalis are facing acute food insecurity,” said Adeso Executive Director Degan Ali.
“We are likely to see that number (food insecure) rise if money transfer companies cannot remit funds from the United States to Somalia,” Ali added.
Each year, Somalis living abroad send approximately 1.3 billion U.S. dollars back to Somalia in an incredible show of solidarity to help friends and relatives meet their immediate needs.
These remittance payments also help supports numerous businesses and represent more than all foreign aid and investment in Somalia combined. Experts estimate that over 200 million dollars is at stake with this decision.
Merchants Bank of California on Jan. 27 informed Somali- American money transfer operators (MTOs) that it would discontinue their relationship from Feb. 6, citing business complexity.
According to Adeso, if the account closures proceed as scheduled, between 60 to 80 percent of U.S. remittances to Somalia could be affected, and some companies will be forced out of business immediately.
