Samson » September 15th, 2021
Somalia is on the cusp of becoming the world’s first cashless society
15th September, 2021
The launch of the National Payments System allowed Somalia to centralize its digital payments, which put the country on the cusp of a true digital revolution.
Although the first ATM was installed in the Somali capital only in 2014, the digital economy in this country since then has been astonishing, as after only seven years, Somalia is on the verge of becoming the first cashless society in the world, according to the report. African Business website.
Somalia’s central bank introduced a centralized payment system last August that connects 13 lenders in the country and formalizes digital payments, making payments easier for people across the country. With more than two-thirds of all payments in Somalia made via mobile money platforms, the untapped market for new infrastructure, applications, payment systems, and fintech is huge.
Central Bank Governor Abdirahman Mohamed Abdallah said: “Somalis are world-renowned for their commercial intelligence. Add to this with the Somali youth and advanced adoption of technology in the country, the equation equals an innovation hub, which is exactly what Mogadishu has become.”
Over the past decade, Somalia has worked with international financial institutions, the World Bank, the African Development Bank, and the International Monetary Fund to implement major economic reforms. The state has approved the necessary legal frameworks to create a conducive environment for companies, and better facilitate foreign and domestic investment in the country, and the booming financial sector will create opportunities for Somalis at home and abroad.
Somalia is already a world leader in the use of mobile money, with more than 70% of the population of 13 million using mobile money transfer services. The national payment system would be an unprecedented boon to the economy, which in the past struggled with massive fraud. Somali expatriates who send their remittances home can now rest assured that upon their return they will have the same financial strength, as they have elsewhere. This also shows Somalia’s potential for foreign investment, as the country, after thirty years of devastating civil war, has come a long way in rebuilding its war-torn economy. Insurgents from Al-Qaeda’s Al-Shabab movement continue to exert influence over large swathes of territory, discouraging foreign investors.
In the age of Covid, cash is no longer king, as citizens around the world are rapidly embracing cards, the internet, and financial transaction applications. Norway is currently ranked as the most cashless society in the world. LINK
Source: Dinar Recaps
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