Somali and Kenyan bank associations share experiences on financial sector development

By T. Roble

Heads of major financial institutions in Somalia under the Somali Bankers Association (SBA) umbrella kicked off a four day benchmarking session with their Kenyan counterparts Tuesday as they aimed to gain experience and expertise from the neighbouring country.

Hosted by the Kenya Bankers Association (KBA), SBA representatives drawn from five banks namely Dahabshiil Bank, Salama Bank, International Bank of Somalia (IBS), Premier Bank and Amal Bank sought to draw experience from KBA which has been in existence for over 50 years.

“We are hoping that in this four days visit, we will be able to take back a lot of experience and expertise and also the functionality of the financial sector in Kenya,” SBA Chief Executive Officer Guled Osman Mohamed.

Mohamed said his team was keen on drawing from Kenya’s experience in building the nascent SBA which has now been in operation for the last one and half years. He added SBA was working with various stakeholders among them Parliament in developing a robust financial regulatory framework in Somalia to ensure growth and public confidence in the financial sector.

“We are actively working with the various actors in building a strong regulatory framework in Somalia. The amendment of the Somalia Financial Law is currently in the process and it will also incorporate Islamic Finance Banking Act,” added Mohamed. “All our members are actively contributing towards this process.”

Kenya Bankers Association CEO Habil Olaka said Somalia can learn a lot from the successes of his association and also the mistakes over the years to come up with an effective and industry responsive association.

“The whole idea is for us to share with them the journey we have walked along the line and they can also share with us some of the areas they want clarification and from that they can be able to pick out some good things we did and got right,” said Olaka. “They can also learn from our mistakes because we did some things which we didn’t do them very well; now they can learn from those mistakes so that they do not repeat the same mistakes.”

AUTOMATION

Olaka singled out automation of the financial sector as one of the important measures SBA can institute in the Somali financial industry as they start off.

“Given where they are, one of the critical things would be automation of the industry. It can be within individual banks to ensure their banks are efficient as possible.”

Olaka cited the automation of the clearing house in Kenya which has dispensed with physical movement of cheques from banks to the clearing house and back. “We have put a platform where banks digitize cheques and then transmit them electronically to the clearing house.” With this, Olaka noted, opportunities for fraud have been reduced in addition to cutting down on processing time and transaction costs.

Olaka added his organisation was ready to provide capacity building support to SBA.