The role of mobile money in Somalia’s remittance system

© 2019, Springer Nature Switzerland AG. Mobile money is rapidly transforming various sectors and economies worldwide. Somalia is one country that has been transformed by the emergence of mobile money. In 2017, the World Bank estimated that 73% of the Somali population over the age of 16 use mobile money services. Additionally, mobile money is the primary access point to financial services in the country. At the same time, Somalia relies heavily on the remittances to pay for children’s education, social services and provides an investment funds for small businesses. The United Nations estimates that close to 40% of families in the country are dependent on the $1.4 billion remittances per year. Accordingly, remittances companies account for a large segment of the financial sector in Somalia. And yet, both the remittance and mobile money systems function in spite of a lack of a traditional financial system. Mobile money and the underlying technology is at the heart of the supports the daily existence of millions of Somalis. How this system functions and its role as the economic backbone of the country is little understood. Thus, the aim this paper is to analyze the crucial role served by mobile money in the delivery of the billions of remittance dollars into the country. This study is guided by the main question: What role does mobile money and the Somali diaspora in the Greater Toronto Area, through the remittance system, play in Somalia’s remittance system?.