Africa Focus: Aid agencies decry Kenya's move to shut down remittance firms

Some 15 international agencies on Friday voiced concern at Kenya's drastic move to shut down Somali remittance firms over suspicion of financing terrorism.

The agencies including Oxfam, Care International, Adeso and World Vision said the Money Remittance Providers (MRPs) based in Nairobi should be vetted on an individual basis to ensure that they comply with the regulations.

"Many of the companies whose licenses have been suspended are delivering legitimate, formal remittances to the country and should be allowed to continue their services," the agencies said in a joint statement issued in Nairobi.

The East African nation on Tuesday suspended the licenses of 13 Somali remittance firms suspected of financing terrorism in the country.

This decision came in the wake of the April 2 terrorist attack that took place at Garissa University College, killing at least 148 people and follows similar closures over past months in the United States, Britain and Australia.

The government later froze the accounts of 86 individuals and entities suspected to be financing terrorism in the country, including Somali remittance firms.

With the closure of MRPs, the agencies said the Somali families are losing their only formal, transparent and regulated channel through which to send and receive money.

The move came as hundreds of customers who rely on the system to send and receive money from their relatives in the Diaspora remained stranded as details emerged over the identities of high profile individuals and organisations linked to the suspended businesses.

Eastleigh Business District Association (EBDA) Chairman Ibrahim Hussein urged the government to allow the money remittance services to continue as investigations proceed. He said nine out of the 13 suspended firms are EBDA members.

Hussein said the operations of the money remittance providers are strictly regulated by the Central Bank and the Financial Reporting Centre who have access to all the transactions carried out.

Every year, Somalis from around the world send approximately 1. 3 billion U.S. dollars to Somalia to support families and friends.

This represents 24-45 percent of the country's GDP and more than all annual humanitarian aid, development aid and foreign direct investment combined.

Studies have shown that money received from overseas is used to meet basic needs, including food, water, healthcare, and education.

"Kenya faces a genuine threat of terrorism, which must be tackled. While recognizing the many challenges faced by the government of Kenya in trying to stem terrorism, a disruption to flows of genuine remittances to Somalia should be avoided," the agencies said.

Kenya Forex Bureaus Association CEO Anthony Wachira said the hasty closure of remittance firms will severely disrupt the livelihoods on many people in the country who receive or send money through them.

Wachira called on the government to give the bureau owners time to continue operating their business as they go on with their investigations over alleged links to terrorism.

Most of the blacklisted remittance companies that appeared on the gazette notice remained closed from Tuesday with written notices that they would resume their operations soon. Endi