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The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges

Since the collupse of Somalia’s central government in 1991, Somalia experienced an intractable civil war that not only undermined and devastated much of the nations’ social life but also, led to a massive collapse of the country’s financial sector. Nearly a quarter century, Somalia has no functionin...

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Main Authors: Musse, Abdifatah Mohamed, Ab Rashid, Rosemaliza, Zainol, Zairy
Format: Article
Language:English
Published: OMJP Alpha Publishing 2019
Subjects:
HF5601 Accounting
Online Access:http://repo.uum.edu.my/26149/1/IPJAS%203%201%202019%2041%2049.pdf
http://repo.uum.edu.my/26149/
http://ipjaf.omjpalpha.com/index.php/ipjaf/article/view/64
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spelling my.uum.repo.261492019-06-30T03:05:55Z http://repo.uum.edu.my/26149/ The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges Musse, Abdifatah Mohamed Ab Rashid, Rosemaliza Zainol, Zairy HF5601 Accounting Since the collupse of Somalia’s central government in 1991, Somalia experienced an intractable civil war that not only undermined and devastated much of the nations’ social life but also, led to a massive collapse of the country’s financial sector. Nearly a quarter century, Somalia has no functioning financial system due to the conflict and political mayhem. Such circumstances prevented Somalia from developing an effective and coherent financial system. Following the collapse of the country’s institutions, the only financial system that existed during these turbulent times were Xawaalads or money transfer operators mostly founded by Somali diasporas migrated to many countries around the world due to the country’s instability. Another type of informal financial service emerged during the conflict was mobile money or mobile banking operated by giant telecommunication companies in the country. Following the formation of Somalia’s federal government in 2012 and the return of relative normalcy, the major money transfer companies converted to full banking institutions and sought a license from the central bank as full-fledged Islamic financial banks. The purpose of this paper is to explore the emergence of the Islamic banking industry, opportunities and challenges ahead. The paper relied on secondary data obtained from textbooks, journals, newspapers and reports. The study found that Islamic banks in Somalia have potential opportunities but face unique challenges due to the effects of the civil war. The paper also postulates some recommendations for the policymakers to deal with the challenges facing the Islamic banks in Somalia. OMJP Alpha Publishing 2019 Article PeerReviewed application/pdf en http://repo.uum.edu.my/26149/1/IPJAS%203%201%202019%2041%2049.pdf Musse, Abdifatah Mohamed and Ab Rashid, Rosemaliza and Zainol, Zairy (2019) The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges. Indian-Pacific Journal of Accounting and Finance (IPJAF), 3 (1). pp. 41-49. ISSN 2600-9161 http://ipjaf.omjpalpha.com/index.php/ipjaf/article/view/64
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HF5601 Accounting
spellingShingle HF5601 Accounting
Musse, Abdifatah Mohamed
Ab Rashid, Rosemaliza
Zainol, Zairy
The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges
description Since the collupse of Somalia’s central government in 1991, Somalia experienced an intractable civil war that not only undermined and devastated much of the nations’ social life but also, led to a massive collapse of the country’s financial sector. Nearly a quarter century, Somalia has no functioning financial system due to the conflict and political mayhem. Such circumstances prevented Somalia from developing an effective and coherent financial system. Following the collapse of the country’s institutions, the only financial system that existed during these turbulent times were Xawaalads or money transfer operators mostly founded by Somali diasporas migrated to many countries around the world due to the country’s instability. Another type of informal financial service emerged during the conflict was mobile money or mobile banking operated by giant telecommunication companies in the country. Following the formation of Somalia’s federal government in 2012 and the return of relative normalcy, the major money transfer companies converted to full banking institutions and sought a license from the central bank as full-fledged Islamic financial banks. The purpose of this paper is to explore the emergence of the Islamic banking industry, opportunities and challenges ahead. The paper relied on secondary data obtained from textbooks, journals, newspapers and reports. The study found that Islamic banks in Somalia have potential opportunities but face unique challenges due to the effects of the civil war. The paper also postulates some recommendations for the policymakers to deal with the challenges facing the Islamic banks in Somalia.
format Article
author Musse, Abdifatah Mohamed
Ab Rashid, Rosemaliza
Zainol, Zairy
author_facet Musse, Abdifatah Mohamed
Ab Rashid, Rosemaliza
Zainol, Zairy
author_sort Musse, Abdifatah Mohamed
title The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges
title_short The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges
title_full The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges
title_fullStr The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges
title_full_unstemmed The emergence of Islamic Banks in Somalia in the post-conflict era: prospects and challenges
title_sort emergence of islamic banks in somalia in the post-conflict era: prospects and challenges
publisher OMJP Alpha Publishing
publishDate 2019
url http://repo.uum.edu.my/26149/1/IPJAS%203%201%202019%2041%2049.pdf
http://repo.uum.edu.my/26149/
http://ipjaf.omjpalpha.com/index.php/ipjaf/article/view/64
_version_ 1644284520939126784
score 13.211869

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