In an article in the Business Life section of the UK's Financial Times on 25 May, Katrina Manson presented an intriguing profile of Somali entrepreneur Abdirashid Duale, CEO of Dahabshiil - the largest funds transfer company in the Horn of Africa. Titled, Money man serves the Somali diaspora, the piece outlines the central role Mr Duale has played in expanding his father's firm. Mr Duale tells the remarkable story of a business which has thrived against extraordinary odds to serve Somali communities across the world.
His career began when he was still a young boy in Burao - a 'dusty livestock trading town' in what is now Somaliland, the semi- autonomous north western region of Somalia, where since 1970 his father Mohamed Said Duale had run a small general store: 'From a very early age I got used to talking to adults ... while other friends or even my brothers used to play football, for me my fun was to stay in the store, and sell people goods'. This early experience of serving fellow Somalis was to prove invaluable later on when, not yet twenty years old, Mr Duale arrived in the UK to establish Dahabshiil's operation in East London - a major centre of the company's activities to this day.
Dahabshiil itself began, as the article points out, 'by default, a device to overcome one of the many challenges in running a business in Somalia' - a reference to the foreign exchange controls imposed by the Somali government during the 70s and 80s that restricted the direct remittance of funds back to the homeland from the growing Somali diaspora in the Middle East. To bypass these controls, Mohamed Said Duale made use of a trade-based system that involved migrants financing purchases of goods in the trading hub of Yemen, which were then imported and sold, with the appropriate sum in local currency being passed on to their families. By making the connection between his own need for hard currency to purchase goods in Yemen and the rising demand in the Middle Eastern diaspora for a remittance transfer service, Mr Duale Sr. had found a way to turn a profit from borrowing - making a cut on both the sale margin and the exchange rate.
This 'sideline', as the article continues, was to evolve into Dahabshiil's core activity, but in those early days neither Mr Duale nor his father could have envisaged the sequence of events that would lead to the complete collapse of the business, followed by its rise as a global company.
In May 1988, amid increasing hostilities between President Siad Barre's regime and clan-based dissident groups, the rebel Somali National Movement invaded Burao along with part of Hargeysa - now the region's capital. Government forces responded with heavy bombardment of both towns, forcing hundreds of thousands to flee to neighbouring Ethiopia, the Duale family among them. Abdirashid still remembers the day: '"There was blood everywhere - we couldn't stay. We left our car, our shop, our house, everything."'
In the refugee camps of Ethiopia, his father found Somalis in desperate need of a service for the remittance and receipt of funds, and drew upon what was now an extensive network of contacts in the Middle East to re-establish the venture along new lines, this time charging commissions on sums transferred while still making a further cut on the currency exchange, a model Dahabshiil has retained to this day.
Operating in a war-torn region carried with it enormous risks, and money transfers back to Somalia were often restricted, yet demand was strong and the new business began to flourish. Mr Duale was still a teenager when he went to London to set up Dahabshiil's first office in Europe, registering as a sole trader and starting the UK business from scratch: '"I knew Somalis, I knew how to serve them, but I did not know about formality – in Burao you don't need accountants, lawyers, a bank."' He employed an accountant and worked seven days a week, improving his English and adapting the business to conform to new laws and regulations.
Today, Dahabshiil's business extends across Europe and North America, and as the article points out, the company has been so compliant with host countries' regulations that it was able to seize a large share of the money transfer market when one of its Somali competitors, al-Barakat, was shut down by US authorities in the aftermath of 9/11.
In 1991, three years after fighting had swept Burao, the regime broke down and the capital Mogadishu erupted with violent clashes between rival factions. Around one million Somalis sought refuge in neighbouring east African countries, as well as in the Middle East, Australia, Europe and North America. Everyone was affected by the conflict - as Mr Duale put it: '"After 1991 all the Somalis were displaced in a way. I'm one of them, so we know where they live, and how to communicate with them and serve them."'
Dahabshiil now handles a large proportion of the estimated $1.6 billion remitted to the Somali-speaking regions each year, a vital flow of income that has helped to boost private sector growth. Its expanding network of over 24,000 agent and payout locations reaches some of the remotest locations in the Horn of Africa, extending an essential lifeline to the inhabitants and helping to nurture isolated local economies.
Abdirashid Duale has been the driving force behind an ambitious strategy of technological improvement and modernisation, introducing Somalia's first ever debit card, 'Dahabshiil eCash' in 2009, and acquiring a majority stake in SomTel, a leading Somali telecoms and mobile internet firm, in 2008. The SomTel acquisition has provided an ideal platform from which to expand into mobile banking, tipped to be an important growth industry within the regional sector due to the costs and inefficiencies arising from the need for large bundles of paper money for transactions in Somali shillings.
This kind of innovation follows a trend with which Dahabshiil's customers are already familiar; remittances in and out of Africa take minutes to clear regardless of where in the world they are sent or received, and customers are notified via SMS as soon as their funds are available. Providing the best possible service to local communities is in the company's best interests for more than just the obvious reasons. The political situation in Somaliland is stabilising, but the south of Somalia in particular can still be a dangerous place. In 2009, two Dahabshiil workers were killed in an attack by the terrorist group al-Shabaab, forcing the firm to close around half of its fifty outlets in Mogadishu. To Mr Duale, the best protection has always been to take a local approach: '"We are 'money without borders' - people need us. Customers see us as a part of them. We're bringing money to them, not guns, so they will look after us."'
Dahabshiil offers a full range of financial services to its international customer base, and employs more than 2,000 people across 144 countries.
