Mobile Money Ecosystem in Somalia

Mobile Money in Somalia

The ICT Sector Unit of the World Bank Group has been working with the Central Bank of Somalia (CBS), the Ministry of Posts, Telecommunications and Technology (MPTT) and the Ministry of Finance (MoF) of the Federal Government of Somalia (FGS) to provide a multi-phased programme of technical support for the ICT legal and regulatory framework and enabling environment.

Altai Consulting has been selected by the World Bank to carry out the programme’s research component and collect supply and demand side market data on the mobile money ecosystem in Somalia.

The research team used mixed research methods to look into the current use of mobile money and the wider state of the mobile money industry in Somalia.

In particular the quantitative survey (~1,800 respondents) covered all economic zones and federated states in Somalia, with field teams deployed in both urban and rural areas.

The research used a combination of landscape mapping, qualitative analysis, descriptive statistical analysis and econometric modelling to provide evidence-based advice on how to bring Somalia’s mobile money ecosystem to the next level, improve financial inclusion for bottom of the pyramid populations and increase the sector’s economic contribution to the development of the country.

The analysis helped frame the programme’s second component, an operational component that will work to develop service(s) enabling civil servants to receive and send money from their mobile phone, including for salary payments and utility bill payments.

Services usage and penetration rates
Cash Mobile money Hawala Bank

A large portion of Somalis do not carry cash anymore. The Somali/Somaliland Shillings are weak and the hard currency is progressively disappearing.

Mobile money services are booming and are used for various types of transactions. Mobile money responds well to Somalis’ needs.

Money transfer agencies, based on hawala, are still important actors in Somalia’s financial sector. Hawalas and mobile money operators are partnering to capitalize on the best that each service has to offer.

Somalia is beginning to rebuild its institutions, including its banking system. Yet the Somali financial sector remains underdeveloped and unsupervised, with a very low penetration of banking services.

Mobile money penetration rates by zone
Zone Penetration
Somaliland 78%
Puntland 82.1%
South Central 68.7%
Overall 72.9%