Mike Aynsley, the former chief executive of Anglo Irish Bank, has joined the board of African money service business (MSB) Dahabshill Transfer Services.
He has also agreed to act as its interim managing director in the UK, where it is the biggest player in the emigrant remittance market to Somalia, estimated at $500 million a year.
Dahabshill employs 5,000 people and operates in 286 locations in Somalia, as well as having branches in 150 countries and 180 agents in the UK alone.
Founded in 1970
The family-owned business is the biggest private sector employer in Somalia and is led by Abdirashid Duale, a British-Somali entrepreneur, whose father founded the business in 1970.
Mr Aynsley said his new job was to “ensure the company remains aligned to the evolving regulatory and business environment in which it operates”.
“Somalia has no formal financial infrastructure and as a result the MSB industry effectively acts as the banking system,” he said. “MSBs are the only safe and transparent way to send money into Somalia.
“As such, millions of people – 40 per cent of the population – rely on remittances to support their livelihoods, and remittance account for around 50 per cent of Somalia’s gross national income.
“Remittances not only allow Somalis to pay for food, medicine and education, but also invest in business and property – with 80 per cent of business start-up capital coming from remittances, this financial lifeline is helping Somalis get the country back onto its feet after two decades of war,” he added.
Dahabshill is used by 95 per cent of charities and agencies to send money to Somalia, and its clients include the Mo Farah Foundation, Oxfam and the United Nations. Typically its clients are Somali's living abroad sending home between $250 and $300.
“Remittances outweigh international aid,” Mr Aynsley said. “For Somalia to continue its progress towards political, humanitarian and economic stability, it is vital to build a self-sustaining economy. Remittances form a vital part of this.”
In May 2013 Barclays announced it was removing banking services from 250 money service businesses in the UK, including Dahabshiil, which had banked with it for 15 years.
The move was seen as a reaction by Barclays to concerns that it could be fined for breaking increasingly stringent anti-money laundering or terror finance requirements.
“Dahabshiil had a spotless record with Barclays and with all UK and international regulatory structures,” Mr Aynsley said. “The decision to withdraw services was totally unexpected and made without any consultation with Dahabshiil.”
Injunction
In November 2012 Dahabshiil won an injunction against Barclays preventing them from closing its account, in a court case where the presiding judge described it as having an “impeccable record.”
The claim was later settled and Dahabshiil is in an agreed transition period to alternative banking arrangements.
“Barclays’ decision to exit its relationship with Dahabshiil should be seen as a result of the regulatory environment in which global banks operate and should not be taken as an indication of any wrong doing by the company,” Mr Aynsley said.
