Feds Choke Off Vital Somali Lifeline

Feds Choke Off Vital Somali Lifeline

The Cable: 16 May 2014

Rules designed to keep money out of the hands of terrorists could soon cut off support to millions of ordinary East Africans too. Last week, another financial institution -- Merchants Bank of California -- started closing accounts belonging to companies that collect money from African immigrants in the United States and send it to Somalia, Eritrea, Ethiopia, and other African countries.

The money-transmitter companies function like smaller versions of Western Union and MoneyGram, but they can send money to far-flung African villages that the big guys don't serve. They rely on banks to make the international wire transfers necessary to get the money there. It's part of a worldwide system of informal financial transactions between residents of impoverished countries and the friends and relatives living abroad who regularly send them money. The World Bank estimates that immigrants will send home $436 billion this year.http://thecable.foreignpolicy.com/posts/2014/05/16/feds_choke_off_vital_somali_lifeline?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+foreignpolicy%2Fthecable+%28The+Cable%29