Stapleton Road, Easton: another corner shop selling snacks, drinks and fags. But this one, like hundreds across the UK, doubles up as an international banking terminal.
Stapleton Road, Easton: another corner shop selling snacks, drinks and fags. But this one, like hundreds across the UK, doubles up as an international banking terminal.
Money service businesses (MSB) like Dahabshiil set up in these shops; serving expat communities who send money to family abroad. But the ‘foreign remittance’ sector has experienced turmoil recently. Banks have ramped up restrictions due to fears of money laundering and terrorist funding.
Forty per cent of Somalis rely on money sent from family abroad – an estimated £114m annually, in the UK’s case. Bristol council estimates 10,000 people of Somali heritage live here. Many use MSBs, and worry whether they’ll be able to support loved ones this way in future.
In 2013, Barclays, the last major UK bank to provide remittance services to Somalia, closed about 250 money transfer businesses’ accounts. This angered the UK Somali community, and NGOs working in the Horn of Africa who also depend on MSBs. Dahabshiil, one of Africa’s largest money traders, battled the decision in the high courts and won a reprieve.
At Chez Saynab cafe on Stapleton Road, local community worker Said Burale tells the Cable “the only way we can send money to family is through Hawala (small money-transfer businesses)”. Abdi Mohammed, of the Somali Media Group, joins in to explain just why foreign remittance channels are so important. “It’s not like the individualistic Western society. We look after each other… sending money to unemployed loved ones is very important.”
But Hawala, a system that’s morphed out of Islamic banking principles, has its downsides. “When sending money, you don’t have 100% guarantee [it] will go through,” says Burale. One risk is that the lack of identification documents in Somalia means it can be hard to verify recipients’ identities.
Forensic accountant and fraud specialist Mark Jenner, who has dealt with cases involving Hawala, says criminals are hijacking systems used by migrant workers to send money to their families. “The system is so complex and circular that sometimes you have difficulty tracing where the money is going,” he says, adding that regulators, namely the Financial Conduct Authority, have “a huge problem on their hands”.
Last year one US bank closed all its Somali-American money transfer companies’ accounts. In the current political climate, Hawala banking is likely to come under increasing scrutiny by Western governments. But for Bristol’s Somali expats, the priority is supporting families abroad.
The UK government has established an Action Group on Cross Border Remittances, with the stated aim of “strengthening the UK-Somalia remittance corridor”. But ultimately, says Said Burale, “If there will be a change it must come from the community. The government must ask the community what is the best solution.”
