VZCZCXRO8419
PP RUEHDE RUEHROV RUEHTRO
DE RUEHLO #1303 1531418
ZNR UUUUU ZZH
P 021418Z JUN 09
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC PRIORITY 2495
INFO RUEHNR/AMEMBASSY NAIROBI PRIORITY 0466
RUEHDJ/AMEMBASSY DJIBOUTI PRIORITY 0090
RHEHNSC/NSC WASHDC PRIORITY
RUCNSOM/SOMALIA COLLECTIVE PRIORITY

UNCLAS LONDON 001303 
 
SIPDIS 
SENSITIVE 
 
DEPART FOR INR/B 
 
E.O. 12958: N/A 
TAGS: EAID PREL EFIN PINR SO UK
SUBJECT: SOMALILAND: LACK OF FINANCIAL SECTOR REGULATIONS 
INHIBITS PRIVATE SECTOR DEVELOPMENT 
 
REF: 08 LONDON 2188 
 
¶1. (SBU) Somaliland's economic growth and development are 
hindered by having no legislative framework to regulate the 
financial services sector, Saad Ali Shire of Dahabshiil, the 
UK's largest Somalia remittances transfer firm (reftel), told 
Poloff June 2.  He offered the following thoughts: 
 
-- The USG should press Somaliland authorities to pass 
legislation to regulate the financial services sector.  Shire 
explained that Dahabshiil had paid consultants to draft 
legislation, in coordination with the World Bank, but 
Somaliland politicians had not enacted it.  He said many 
thought it was because the Central Bank Governor and Minister 
of Finance fear that robust financial institutions could 
diminish their authority. 
 
-- The USG should work with Central Bank Governor Abdul 
Rahman and the Minister of Finance to "update their thinking" 
on management of financial services.  Shire said both have a 
"leger-based mentality" when considering finances and would 
benefit from trips abroad to learn how governments should 
support financial services industries as engines of economic 
growth. 
 
¶2. (SBU) On Dahabshiil's operations, Shire said that 
remittance transfers are down by 20 percent over the same 
period last year due to the decrease in strength of the 
British Pound and the increasing number of UK-based Somalis 
who are unemployed.  He said Dahabshiil, an organization 
which Embassy London has been encouraging to offer 
Sharia-compliant microloans in Somaliland, offers limited 
financial services in Somaliland in addition to money 
transfer services, such as non-interest earning savings 
accounts.  He also noted that Dahabshiil had just received a 
license to operate as a fully functional bank in Djibouti. 
 
Comment 
------- 
 
¶3. (SBU) Shire is very engaged in the UK's Somali Diaspora 
community, where he actively cultivates business 
relationships.  He plans to travel to Somaliland in late June 
to undertake a comprehensive study of Somaliland's financial 
services sector and to encourage the Somaliland authorities 
to create a regulatory framework, with the hopes of enhancing 
Dahabshiil financial services products in Somaliland. 
 
 
Visit London's Classified Website: 
http://www.intelink.sgov.gov/wiki/Portal:Unit ed_Kingdom 
 
LeBaron