Dahabshiil

Dahabshiil (meaning "Gold smelter" in Somali) was founded in 1970 by Mohamed Said Duale, a Somali entrepreneur based in Burao, the capital city of Togdheer province in Somalia.

Initially a general trading enterprise, the firm began specialising in remittance broking during the 1970s, when many Somali males from Somalia migrated to the Gulf States for work. This resulted in a growing demand for services to transfer money from those migrant workers back to their families.

Because of foreign exchange controls imposed by the Somali government at the time, most of the funds were transferred via a trade-based system known as Franco Valuta (FV); the latter process involved the import of goods, proceeds from the sale of which were sent to migrants' families. These transactions formed the bulk of Dahabshiil's business throughout the 1980s.

With the Somali Civil War fast approaching, the Duale family were among the hundreds of thousands who retreated to the Somali-inhabited Somali Region under Ethiopian Occupation. The business in Somalia collapsed, but Duale was able to draw on an extensive network of contacts in the Gulf to re-establish the venture, setting up a small office in Ethiopia to serve displaced Somali communities there and in Djibouti.

In 1989, Dahabshiil opened its first office in London where a number of Somalis had arrived during the war. The branch in Whitechapel was managed by Mohammed Duale's son, Abdirashid Duale, who began to expand the business as the Somali population in the UK grew.

Branches and transfer network

Dahabshiil is the largest of the Somali money transfer operators (MTOs), having captured most of the market vacated by Al-Barakaat. The firm has its headquarters in Dubai and employs more than 2,000 people across 144 countries, with 130 branches in Somalia, a further 130 branches in the United Kingdom, and 400 branches globally. Its worldwide network comprises more than 24,000 agent and branch locations, and the company offers both SMS notification and 24-hour online transfers.

Products and services

Remittance transfer remains Dahabshiil's core business, but the company has diversified to offer financial services to international organisations, businesses and private individuals. Most of the major international development organisations operating in Somalia use Dahabshiil to transfer funds, including the UN, WHO, World Bank, Oxfam, Save the Children and Care International.

In 2008, Dahabshiil acquired a majority stake in Somtel, a Somalia-based telecommunications firm specializing in high speed broadband, mobile internet, and mobile phone services. The acquisition provided Dahabshiil with the necessary platform for a subsequent expansion into mobile banking, a growth industry in the regional banking sector.

In early 2009, Dahabshiil opened an Islamic bank, Dahabshil Bank International, in Djibouti. An international bank, DBI provides services to business and private clients demanding Shariah-compliant financing. Operations centre on asset finance, partnership finance and lease finance.

Controversies

Guantanamo Bay detainee

In February 2009, Peter Finn writing in The Washington Post, cited allegations that Guantanamo captive Mohammed Sulaymon Barre, while working for Dahabshiil, may have laundered money for terrorists. He suggested this was an example of the difficulties that faced the joint task force US President Barack Obama had put in place to conduct new reviews of the detainees' status.

Unfair advantage through ties with the government

Ever since Ahmed Mohamed Mohamoud was elected for president in 2010, certain Somali journalists and political groups have been accusing him of providing Dahabshiil with unfair advantage and complete control over Somali remittances, which play a significant role on the local economy. These allegations are often based on the fact that Ahmed Mohamed Mohamoud has appointed Ali H. Hassan, who is Dahabshiil's founder cousin, as the chief of cabinet, and Sa'ad Haji Ali Shireh, the former CEO of the firm as a minister

Website shutdown

In 2011, a group of independent Somali journalists alleged that Dahabshiil had temporarily succeeded in convincing their web-host to shut down their site because they had published stories critical of the firm. They published a copy of a letter faxed to their webhosting service, demanding the removal of over a dozen of their articles about Dahabshiil. The reporters also suggested one of the stories Dahabshiil wanted removed concerned a song by popular Somali singer Saado Ali Warsame that was critical of Dahabshiil.

Bell Pottinger

In 2011, an undercover investigation by The Independent suggested that public relations firm Bell Pottinger had been contracted by Dahabshiil to minimise any negative reporting of the company, including the Guantanamo Bay detainee affair. The Bell Pottinger executives detailed their techniques, which purportedly included manipulating the ranking of Google search results to suppress unwanted coverage, and also boasted that they had a 'team' that could manage Wikipedia articles. The contract was said to have been a success.

Barclays bank account closure

In 2013, Barclays Bank announced that it would no longer provide banking services to Dahabshiil, citing concerns over compliance with anti-money laundering regulations. The move followed a similar decision by the British bank, HSBC, to sever ties with the company in 2012. This resulted in Dahabshiil's accounts being closed by both banks, leading to financial difficulties for the company and its customers.

Dahabshiil has since been fighting to regain access to banking services.