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The last US bank to facilitate money transfers to Somalia also ceased doing so in February. Remittances from Britain, too, have been severely constricted by the decision by Barclays in 2013 to close money agents’ accounts.
Purely as a cost-benefit proposition, the banks’ decision makes sense, said Matt Collin, an economist with the Center for Global Development in Washington DC.
“Transfers are a pretty marginal business for these banks,” he said. “Instead of taking a very costly approach of looking at each individual remitter and deciding if they’re OK, they’re saying: this is too costly, the cost of compliance is too high. It’s easier for us to just let these accounts go.”
These calculations made in skyscrapers in Sydney or London have a huge impact on the family of Melbourne chaplain Abdiahman Mohamud, in Mogadishu. He says the $300 he sends his cousins each month literally keeps them from starving.
“I can understand where the banks are coming from. They have an obligation to their shareholders to minimise risk,” he said.