Dahabshiil welcomes World Bank proposal on decrease of mobile money vulnerabilities to stimulate growth - CEO Duale

(MENAFN - SomTribune)

'A robust regulation that addresses de-risking issues to reduce vulnerabilities associated with the widespread use of mobile money transactions as put forward by the World Bank is a win-win proposal for all stakeholders,' Abdirashid Duale, CEO of Dahabshiil companies told the Voice of America's Somali section, Thursday.

Abdirashid said financial transactions done through the use of digital money transfers, especially through the mobile medium, cannot flourish or operate in a vacuum.

'By way of example,' he said 'a better identification system is the first by which a more effective identification system can be built. To know your customer and follow due diligence parameters is a kind of insurance for both the customer and provider, to say the least'.

Mr Duale pointed out mobile money has become the main channel for digital monetary services due to the security concerns relating to toting large sums of money around, leading to a sharp and increasing demand in use of the more trusted mobile money systems.

'But the fact remains that building regulations on the existing bond between subscriber and provider is of paramount importance in the long run. The subscriber needs to be cushioned of possible losses and/or glitches in the system as providers, vis-à-vis, need to mitigate market and fiscal risks peculiar to digital money transactions, ' Duale said.

'The prevailing environment in mobile money transfers has very significantly contributed to an accommodating business atmosphere which, in turn, spurred a kind of inclusive growth and community resilience that is rarely found elsewhere,' he said.

Abdirashid Duale believes that inclusive regulations borne of sound studies and close consultations between the private and public sector can create an enabling environment for an accelerated investment drive.

'The Diaspora can continue playing a pivotal role in economic growth by investing in, for instance, construction, services, education, health and the like all of which depend heavily on digital money transfers. Hence, the looming need to create safeguards for both investors' and consumers' funds, and ensure the safety and reliability of services,' Mr Duale said.

Duale stated that Dahabshiil will, most definitely, continue to uphold its compliance to regulations tradition which, perhaps, is a key to its local and international success in the market.

'Dahabshiil's DMT, Somtel and eDahab welcome the introduction of regulatory mechanisms which, I am sure, will further enhance trust and reliability of the mobile money market,' he said.

Mr Duale is of the mind that further consolidating existing trust between providers and subscribers through inclusive regulations can only add to the enviable strength and resilience economic growth is presently showing.

Mr Duale pointed out that since Somali telecom providers, such as Somtel, are already using proxy partners in neighbouring countries which entail international licenses and validation, the same principle, the same deference must be made to local fiscal instruments and licensing.

'Transitioning from telecom providers to mobile money operators, a different set of opportunities are emerging for mobile networks currently undertaking banking functions in the mobile money value chain,' Duale said.

Somali mobile money transfer providers are, as the WB report pointed out, way ahead of many other developing countries who are still figuring out 'how to incentivize customers to maintain balances in their mobile money wallets'. In contrast, Somali operators 'have already partnered with local retailers and merchants to ensure smooth digital exchanges, even for low-value transactions', the report points out.

The World Bank report states that Somali providers are currently processing not less than an estimated 155 million transactions—worth about $2.7 billion—a month.

According to the report, about 7 out of 10 Somalis regularly use mobile money services, as the number of mobile money subscriptions has grown at an average rate of about 20 per cent a year since 2014. In addition to retail payments, mobile money is used for salary transfers, bill payments, remittances and cash transfers, and savings in mobile wallets.

"A sound financial sector can underpin economic growth and development and provide pathways toward financial inclusion and poverty reduction", says the report.

The report recommends a ‘phased-in approach for regulating mobile money services, with a focus on protecting consumer funds, and ensuring continued and undisrupted service delivery'.

Dahabshiil operates extensive business concerns worldwide not only in the money transfer, which still remains its core competency, but in banking, telecommunications, and mobile money transfers through its fast-growing eDahab brand.

SOURCE:MENAFN