It is a misnomer to call these Somali remittance companies. While the owners and origins of these companies are Somali, most of them have operations in the Gulf, United States, Europe and East Africa and almost all are, in fact, owned and managed by citizens of these countries.
According to Waldo, Somali nationals own less than 15 hawalas while the overseas-owned remittance companies could number in the hundreds.
It is the close partnership and networking between the overseas hawalas and the local Somali hawalas that gives the impression that they are one and the same.
While the remittance companies rely mainly on the business of migrant money transfers from Western economies for family maintenance and investment in Somalia, individuals and businesses within the country use them as crude savings banks, depositing funds for short periods.
According to the KPMG report, this quasi-banking role continues to generate the most interest amongst major remittance companies. In fact, Dahabshiil is currently constructing a bank in downtown Hargeisa.
However, most other remittance companies face major constraints in converting themselves into banks, not the least of which is the lack of a centralised government and financial regulatory authority.