Somali residents concerned over sending money home

Somali residents concerned over sending money home

Experts have said that the Somali residents in Maine are concerned over sending money back home to support family as the banks that helped transmit the money are going out of business.

Many Somali immigrants in the US act as a lifeline for their family members in Somalia. They sent more than $200 million back home every year, according to OxFam America. There are concerns that this flow of funds might be affected as banks that wire the money to the African country are facing difficulties in continuing operations.

The situation might have consequences for Somalia as well as for the people in the US. Residents said that it is critical to survival of several families to receive funds form their relatives overseas. Somalia doesn't have a developed banking sector linked to the global banking system. Small services send money in association with Somali-American transfer companies that are based around large Somali populations in the U. S.

Only a few US banks are ready to send money to its final destination in Somalia. Some are even planning to stop all services to the African country. Scott Paul, a policy advisor for OxFam America said that the banks are concerned that some of the money being transferred could be used for money laundering or other criminal activities. However, he said that closing down of formal banking links might result in more informal channels.

"Because if formal channels shut down, people will send less money, and that will hurt families. At the same time, the money people do send will go through informal channels. And that's completely underground. Regulators won't be able to track the money. Law enforcement officials won't be able to figure out who is receiving it. So that's the worst-case scenario," Paul says.