Jul 18th 2012,
BEFORE opening a bank in his native city, Liban Egal considered some of the risks involved, including having his premises destroyed by artillery fire. To reassure himself he took a drive around the outskirts of Somalia’s capital, Mogadishu, to look at the defences of the African Union’s peacekeeping forces against the return of the Shabab, the extreme Islamist militant group that has been squeezed out of most parts of the city in the past few months.
He decided to go with his “gut feeling” that the group that still controls much of southern and central Somalia was not coming back. There are still warlords in the city, he acknowledged, but they no longer have heavy weapons.
So the doors at the aptly named First Somali Bank (FSB) opened in May. More than 100 customers have opened accounts. Some did so by bringing in sacks of Somali shillings, worth 22,000 to the dollar, while others opted for accounts in American greenbacks. Mr Egal recently set up a TedX conference on the “Rebirth of Mogadishu”. Even for an entrepreneur who took his first steps in finance with a cheque-cashing business in a rough neighbourhood of Baltimore in America, Mogadishu is a challenge. No one has seen a chequebook here since the cold war, when Somalia was in the Soviet orbit. Mr Egal, who is waiting for the still fragile government to give him a banking licence, admits that conditions are “not yet right” for ATM machines.
His bank is aiming for “branchless banking”, with deposits, transfers and withdrawals being made through agents using point-of-sale handsets running on a cellular network. Customers will get a biometric card and cooperating outlets like the Village restaurant on the capital’s Jazeera beach will start swiping them to pay for such dishes as grilled lobster.
Source: The Economist