The Central Bank of Somalia (CBS) licensed the first two foreign lenders since 1970.
Central Bank Governor Abdirahman Mohamed Abdullahi said Egypt’s Bank Misr and Turkey’s Ziraat Katli can now operate in the country after the board approved their applications.
“The CBS Board of Directors has concluded that both banks have met all CBS banking license requirements, and their applications have been approved,” he said.
“After a thorough process, we are pleased that the Board of Directors has approved the license applications from Ziraat Katlim Bank and Banque Misr.
“These are two solid banks that will add value to the development of the Somali financial sector and contribute to the growth of our economy,” he added.
In the 1960s, foreign commercial banks that operated in Somalia included the Italian Banco di Napoli and Banco di Roma, the Egyptian Banque de Porte Saide, and the British National Grindley’s Bank. But, when the Supreme Revolutionary Council (SRC) overthrew the civilian government in October 1969, all foreign banks in Somalia were nationalized by order of the SRC on May 7, 1970.
The junta then formed the Somali Commercial and Savings Bank, using the assets of nationalized lenders, in 1972, which operated until its collapse in 1988.
So far, the Central Bank of Somalia has licensed 13 local commercial banks, including Salaam Somali Bank and Dahabshil Bank.
Businessmen hailed the move, saying the new banks would make it easier to access capital for big projects.
“Somalia is rich in resources, and in harnessing them, innovative people need capital and financial injections that big banks can afford,” Abdullahi Nur Guled, a Somali-Tanzanian businessman, said. addressing to East Africa on the phone.
He added that people who deposit their deposits with lenders outside the country can now do their banking locally.
“No society can grow, create jobs and fight poverty without banks that can invest in businesses, government services and projects.”