IslamicFinance.de

A recent UNICEF survey indicates that Somalia is off-track in achieving Millenium Development Goals for Water, Hygiene and Sanitation, a challenge facing Somaliland as well. To off-set the developmental challenges, Somaliland ought to implement sound financial systems. International Development Agencies note that if Somaliland is to have full confidence in Islamic Banking, then it needs to standardise, deregulate and diversify the economy. That would attract more investment from multi-lateral agencies, such as the World Bank, Islamic and African Development Banks (AfDB) and the United Nations. New technologies, such as mobile banking, can enhance the hard to reach areas and further attract potential customers. DBI and Dara Salaam banks are both investing in the latest technology for improving the economy.

Somaliland's President has signed the Central Banking Act into law. According to Central Bank Governor Abdi Dirir the Commercial Banking Act will be passed in the next three to four months.
Back in 2012 the financial sector agreed to have a Dual Banking system where both Conventional and Islamic banking systems operate in the country. However, the Commercial Banking Act is more than four years overdue. Economically, Somaliland's longterm competitiveness can only be ensured by introducing the Dual Banking System in the country.

Somaliland's President has signed the Central Banking Act into law. According to Central Bank Governor Abdi Dirir the Commercial Banking Act will be passed in the next three to four months.
Back in 2012 the financial sector agreed to have a Dual Banking system where both Conventional and Islamic banking systems operate in the country. However, the Commercial Banking Act is more than four years overdue. Economically, Somaliland's longterm competitiveness can only be ensured by introducing the Dual Banking System in the country.

Islamic Microfinance (IMF) is a novel method for human-oriented economic development and a capacity-building tool, which easily fits into the Islamic banking and finance (IBF) paradigm through social responsibility. A financial system should be able to provide financing to different segments of a given society such that, in addition to financial and economic objectives, social objectives may be served. It is imperative for IBF to fulfill such objectives alongside their business interests. Due to the complementarity between IBF and microfinance, there is a need to see further and proactive involvement of IBF and nonbanking Islamic institutions to provide IMF.

Since there are no banks in some parts of Somaliland, the money-transfer industry in the Horn of Africa is important due to its pragmatic versatility. Remittances to the Somali region alone are estimated at $1.3 billion each year. But these transfers now risk becoming impossible: Long-standing Western worries that remittance flows serve as a cover for money laundering and the funding of armed Islamist groups mean the taps could soon be turned off. Somaliland's uneasy transition from informal coping mechanisms to the formal systems of a conventional state remains deeply incomplete. This is one reason for the absence of an internationally recognized banking sector, which makes Somaliland particularly reliant on remittances.

Somaliland President Ahmed Mohamed Silanyo has received a delegation from Islamic Development Bank (IDB) as the president congratulated the delegation for the ongoing development projects run by the Organization in the country. The delegation from the IDB has been in the country for the last 4 days. The Islamic Development Bank is currently implementing several ongoing development assignments including projects relating enhancing Hargeisa main hospital's infrastructures, as well as, Hargeisa and Gabiley Orphanage centers. The delegation and the President of Somaliland have agreed to continue expanding their co-existance and make their cooperation more effective than ever before.

Despite that since the collapse of the central government of Somalia in 1991 there has been no regular operation of financial institutions in the country, a new law was recently passed. It serves as a framework which enables privately owned institutions to open and operate banks in the region. After the approval of the regional parliament in September, on October 4th the President of Somaliland, Ahmed Mohamed Silanyo, signed the Islamic Banking Bill.

Read more on: http://sabahionline.com/en_GB/articles/hoa/articles/features/2012/10/22/...

The central bank of Somaliland expects lawmakers to enact a draft banking law by June, enabling commercial lenders to extend credit to borrowers for the first time.
Somaliland is in talks with Banque pour le Commerce et l’Industrie, based in neighboring Djibouti, and two other lenders to grant them banking licenses immediatly.