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Press Release

19 March 2008

Better deal for Somalis who send money home

Customer in the Daahab Shiil bank, Somalia collecting remittances in US dollars from a relative overseas. Image courtesy of Sven Torfinn /Panos Pictures

People sending money to family and friends in Somalia stand to get a better deal with the launch today of a programme to boost transparency and competition among money transfer companies.

The DFID-backed ‘Send Money Home’ for Somalis programme introduces a new consumer advice leaflet and a dedicated page on the free, independent money transfer price comparison website www.sendmoneyhome.org to help Somalis find the best deal for their needs.

The new leaflet and Send Money Home website will enable consumers to search and compare the services provided by international payment companies highlighting transfer methods, costs, and speed of transfer.

Printed in Somali and English, the leaflet will be distributed through community outlets, Local Councils, Citizen Advice Bureaux, internet cafes and Somali Diaspora organisations, or can be downloaded from the Send Money Home website, or by phoning 0207 100 5655.

International Development Minister Gillian Merron said:

“Previously there was no concise, readily available information to help families find the best deal for sending money to Somalia. By providing better information and transparency, this programme will give greater confidence to the Somali community in the UK, and their families, and will also boost the fight against poverty in Somalia.

“Remittances to Somalia strengthen the livelihoods of hundreds of thousands of families and help develop the private sector in a country where foreign assistance has fallen short and foreign investment has been virtually non-existent. In a region where 43 per cent of people live in extreme poverty, remittances improve living standards. They have helped people start businesses, increased access to education and helped fund the development of hospitals and other key infrastructure.”

Chair of the All party Group on Somaliland, Alun Michael, said:

“My constituency, Cardiff South & Penarth, has been the home of a thriving Somali community for well over a century and currently hosts the largest British-born Somali population in the UK. I myself have developed and maintained long standing ties with this community - which for the most part pre-date my days as a Westminster MP. As such I am delighted to see action being taken which will foster greater transparency and reliability in a system which effectively constitutes a lifeline for a huge number of Somalis.”

Emmanuel Addy, Director of Profile Business Intelligence, which runs the Send Money Home programme on behalf of DFID, said:

“The Send Money Home project has proven to be an extremely valuable tool, providing essential information for those sending money to family or friends, and has been helping Diaspora communities throughout the UK for nearly three years.

“We are delighted to provide information on the best way to send money home for the benefit of the Somali Diaspora which, we hope, will stimulate competition amongst money transfer providers encouraging them to deliver better products and services.”

People in the UK send an estimated £2.3 billion a year to families and communities in over 50 developing countries – a key source of overseas funds for many economies. Yet many find the process difficult and insecure.

According to DFID research, the biggest worry for those sending money is whether it will arrive safely, followed by excessive charges and delays to relatives receiving the money.

Notes to editors

1. DFID launched www.sendmoneyhome.org in March 2005 and has also distributed more than 900,000 information leaflets for some 20 countries, both in English and the national language, among migrant communities. The cost of sending £100 to countries covered by these initiatives has fallen by an average of 5.6% since 2005. For remittance payments by Indians, the UK’s biggest ethnic minority, costs are down by over 20 per cent.

2. ‘Send Money Home’ was the first website of its kind and has led to other price comparison sites from governments including Germany, France, the Netherlands and Norway.

3. The ‘Send Money Home’ for Somalia programme follows the recent launch of a customer charter, developed by the DFID-supported UK Remittances Task Force, committing participating money transfer companies to giving customers clear, transparent information in a standard format.

4. In 2006/07 DFID provided £16.6 million in aid to Somalia. The programme has focused on delivering humanitarian relief to the most vulnerable, strengthening government capacity for the Transitional Federal Government (TFG) and Puntland and Somaliland authorities, and delivering improved health and education services across Somalia. Funding is almost exclusively delivered via UN agencies and NGOs, with approximately 50% of funding going to Somaliland directly or indirectly.

5. DFID is currently preparing a new Somali Country Plan (CP). We shall be launching an on-consultation of the CP at the end of March and welcome contributions from a wide range of interested groups to help ensure that the impact of our proposals on different sectors of society is taken into account. This will be accessible on our consultations page.

Fact File on remittances to Somalia
Due in large part to the ongoing civil war, it is estimated that between 1 and 1.5 million Somalis live abroad, creating one of the world’s largest per capita diaspora networks and making Somalia one of the world’s largest per-capita recipients of remittances. Remittances to Somalia are estimated at between US$750 million and $1 billion. International development aid is approximately $272 million and in 2003 Somali exports totalled just $55 million. It is estimated that 90% of Somalia’s foreign exchange earnings are generated by remittances. Some 40% of all households in Somalia rely on money sent by Somalis overseas. In a region where the average per capita income is $210 per annum and 43% of the population lives in extreme poverty, remittances have a significant effect on the standard of living for recipients. Two thirds of the urban population relies on remittances and 80 per cent of start-up capital for businesses is funded from remittances. Remittances have been used to build and repair infrastructure, to establish and maintain hospitals and to allow thousands of children to attend primary schools. The UK’s 500,000-strong Black African community sends an estimated £200 million a year to loved ones in Africa, at an average of £910 per household. The cost of sending £100 to countries covered by DFID’s ‘Sending Money Home’ programme has fallen by an average of 5.6% since 2005. Globally, the World Bank estimates that more than US$220 billion worth of remittances were sent to developing countries in 2006.

Fact File on remittances to Somalia

Due in large part to the ongoing civil war, it is estimated that between 1 and 1.5 million Somalis live abroad, creating one of the world’s largest per capita diaspora networks and making Somalia one of the world’s largest per-capita recipients of remittances.
Remittances to Somalia are estimated at between US$750 million and $1 billion. International development aid is approximately $272 million and in 2003 Somali exports totalled just $55 million.
It is estimated that 90% of Somalia’s foreign exchange earnings are generated by remittances.
Some 40% of all households in Somalia rely on money sent by Somalis overseas. In a region where the average per capita income is $210 per annum and 43% of the population lives in extreme poverty, remittances have a significant effect on the standard of living for recipients.
Two thirds of the urban population relies on remittances and 80 per cent of start-up capital for businesses is funded from remittances.
Remittances have been used to build and repair infrastructure, to establish and maintain hospitals and to allow thousands of children to attend primary schools.
The UK’s 500,000-strong Black African community sends an estimated £200 million a year to loved ones in Africa, at an average of £910 per household.
The cost of sending £100 to countries covered by DFID’s ‘Sending Money Home’ programme has fallen by an average of 5.6% since 2005.
Globally, the World Bank estimates that more than US$220 billion worth of remittances were sent to developing countries in 2006.

For more information contact DFID Press Office +44 207 023 1912

DFID Department for International Development

Press Release

Better deal for Somalis who send money home

Notes to editors

Related Links

Fact File on remittances to Somalia