• Register
silatech

Silatech, partners launch Somalia’s First Commercial Microfinance Institution

: Tuesday, June 17 - 2014 @ 12:11

Leading Somali money transfer business Kaah Express has joined with regional social initiative Silatech and the American Refugee Committee (ARC) to launch Kaah Islamic Microfinance Services (KIMS), Somalia’s first commercial microfinance institution, with the objective of providing financial access and stimulating economic development throughout Somalia.

KIMS’s priority focus is on providing sharia-compliant financial services enabling enterprises, with a focus on those run by low-income women and youth to start and expand.

Youth microenterprise is particularly important in Somalia, given that approximately 70 percent of the population is below the age of 30. With unemployment rates greater than 65 percent, many young Somalis end up as microentrepreneurs by necessity. Given that the country faces some of the lowest levels of access to formal financial services in the world, the vast majority of users of these services will be the previously unbanked.

A recent market study by the KIMS consortium showed that less than five percent of the market demand for microfinance is currently being met in the Somali territories, indicating a potential market of over two million microentrepreneur clients. KIMS will work to meet this demand by operating through Kaah Express’s existing national network of branches and hundreds of local agents, enabling significant cost savings and rapid national reach. The new services will seek to combine financial service provision with the offering of a robust package of financial education, life skills, and enterprise development training to improve the ability of Kaah’s clients to make informed and measured decisions about their financial needs.

KIMS was pilot launched earlier this year in Somaliland and Puntland with support from the FAO-managed Sustainable Economic Empowerment Programme II (SEEDII) and the African Enterprise Challenge Fund (AECF), a multi-donor initiative aimed at stimulating new and innovative business ideas among the private sector in Africa. In its first three months of operations in Somaliland and Puntland, KIMS has provided financing to over 500 enterprises with a 99% repayment to date and its operations are set to expand to include South-Central Somalia soon, with services provided in the capital city of Mogadishu before the end of this year.

At a formal launch ceremony held in Hargeisa, Somaliland on June 11, Kaah Express CEO Hassan Awad said: “This commitment signals our goal to become the first large-scale commercially viable microfinance provider in Somalia. In light of poor socio-economic conditions and limited economic opportunities, the link between unemployment and conflict in Somalia remains significant, despite the recent progress we have seen. There is a dire need to tackle these challenges through new and innovative solutions, and the time for that is now.”

Dr. Tarik M. Yousef, CEO of the youth employment and entrepreneurship social initiative Silatech, said “Innovative microfinance programs provide a lifeline of opportunity for young entrepreneurs, and the establishment of KIMS will provide greatly needed services to transform the lives of thousands of Somalis.”

Meanwhile, American Refugee Committee President and CEO Daniel Wordsworth lauded the entrepreneurial spirit of young Somalis, stating that “The Somalia we know is entrepreneurial in spirit and in reality. It is an honor to work with Silatech and Kaah Express to invest in the future business leaders of Somalia.”

Today's Top Stories

Posted by

Tuesday, June 17- 2014 @ 12:11 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

AME Info Services





Business DirectoryVIEW ALL

Search by name

Search by industry

Browse alphabetically



JobsVIEW ALL

Search for jobs

Latest Jobs