Mar 112014

By Mohammed Waseem

Africa has given the world few money transfer services which have operations in most major countries. Among those companies in Bakaal, a Somali money transfer company headquartered in the UAE. Most of the shareholders in the company are Somali nationals living in Somalia and abroad.

Bakaal has operations in 30 countries across the world. So senders can send money to these countries to be received in local currency or in US dollars or directly into bank accounts in some countries or even delivered to the recipient’s home or business. The primary customers of the company are the Somali diaspora around the world and the migrants from the Horn of Africa living abroad. It is estimated that more than 2.5 million Somalis have migrated to other parts of Africa, Europe, the Americas and Australasia, which suggests the potential in Somalia. The company also facilitates the trade payments the Somali businesses exchange with overseas companies.

Bakaal WorldwideThey have agents and offices across the 30 countries that facilitate the transactions. They don’t have online money transfer service, so if anyone wants to use their service they will have to walk in to any of their offices or agent locations.

In order to send money, a sender has to locate a Bakaal agent or office and walk in to it along with a personal identification document. After this, a simple ‘send’ form has to be filled and hand over the form, the money intended for transfer and the transfer fee to the agent. Once the transaction has been processed, a reference number is generated, which has to be communicated with the recipient. Recipients can collect the money after 10 minutes from the completion of the transaction. Sender can also choose to have the money deposited into the recipient’s bank account or delivered to their home or business.

Bakaal is a start-up money transfer service which has a long way to go in order to develop. Their website has very less information about the service, countries of operation and most importantly information about the company. Their website is poorly maintained and lacks important information which would make the customers look for alternatives because customers seek transparency and as much information as possible.

Feb 082014

By Mohammed Waseem

Africa has many money transfer companies which are doing quite well, though they do not match the services provided by the industry leaders. I spoke about Mukuru in one of my previous articles. In this article, I will discuss about Dahabshiil, the largest African money transfer service.

The company has 24000 agent locations in more than 144 countries. It is one of the oldest money transfer companies launches in 1970. They have been providing services to individuals as well as organizations including Save the Children, Oxfam and Care International. According to the UK Micro Finance club, UN describes Dahabshiil’s services as the only safe and efficient option to transfer funds to projects. Since then, this became their strategy for positioning in the market where competition is high.

Dahabshiil Money TransferThe service was launched for African migrants from the Horn of Africa region to send money back home. With the years, they expanded to other parts of Africa, Europe and the Middle East. In fact, the company’s headquarters were later transferred to Dubai, UAE. The company has diversified into banking and mobile banking in the recent past and broadband services through acquisitions.

Money can be sent through one of the agent locations by paying in cash or online by paying with debit or credit cards. The fee charged is quite high compared to the fees charged by many other money transfer companies. I compared their fees with that of Western Union and found that in most cases, it exceeds the fee charged by Western Union and it is comparatively lesser in only a few cases. Daily limitations apply for a few countries such as Bangladesh, India, Pakistan and Sri Lanka. The complete list of the countries and the limits in USD can be accessed here. The money is usually available for collection in 15 minutes from sending and the recipient is informed through phone or SMS.

Dahabshiil was in the news on different occasions for reasons such as manipulation of internet search results, allegedly suppressing press coverage and the alleged money laundering for terrorist groups, but then cleared of suspicion by the 9-11 commission. Barclays bank had decided to stop Dahabshiil’s service due to the risk of money laundering and funding terrorism but a London High Court prohibited them from cutting Dahabshiil’s bank account. The service is used through Barclays by over 100,000 Somalis living in the UK.

They are trying to regain trust by emphasizing on the trust placed in them by many international organizations, they emphasize that they have been a trusted service since 1970.