When he was eight years old, Abdirashid Duale would rush home from school to work at his family’s little business in Burao, Somaliland, where he sold everything from clothes and shoes to bread and sugar.
He is now the CEO of Dahabshiil, a global money transfer company with 24,000 locations in 144 countries.
He shares his time between London and Hargeisa, the capital of Somaliland, an autonomous territory of Somalia that declared independence in 1991.
Dahabshiil also provides debit cards, reward points, and SMS notification services, as well as the first fully operating bank in Somaliland, which is now being built in the capital.
Abdirashid Duale claims that the company sends $200 million in remittances to east African nations outside of Somalia each year and that it also remits a significant amount of the $1.6 billion transferred back to Somalia each year, making it the largest money-transfer service in the Horn of Africa.
Seizing opportunities in the midst of war
Duale’s small shop was transformed into a global corporation by seizing possibilities in a series of disasters that have befallen Somalia, ranging from poverty to war and terrorism.
The story of the family is intertwined with that of the Somali diaspora. Poverty and trade drove Somalis to Yemen, Dubai, and the Middle East in the first place.
Mogadishu, Somalia’s capital, was overrun by warring parties in 1991, earning Somalia the designation of a failed state.
Around 1 million Somalis live in east Africa and the Middle East, Australia, Europe, and North America.
“After 1991, all the Somalis were displaced in a way,” says Duale. “I’m one of them, so we know where they live, how to communicate with them and serve them.”
How a new business model started
Dahabshiil began by accident, as a means of overcoming one of Somalia’s many obstacles.
Duale’s father, Mohamed Saed Duale, required hard currency from Yemen’s business centre in order to supply the latest shoes from Milan.
Meanwhile, the Somali diaspora wanted to send money home, so Duale’s father would collect hard currency from them in Yemen to buy the shoes, then hand the money over to the “lenders” family members in Burao in local currency, reducing the exchange rate even further.
Rather than paying interest, he had discovered a way to benefit from borrowing.
That sideline would eventually become the company’s mainstay. However, it was not always evident that this would be the case.
Abdirashid Duale recalls the day in 1988 when a liberation force invaded, and the defending regime retaliated with bombs:
“There was blood everywhere – we couldn’t stay. We left our car, our shop, our house, everything,” he recounted.
The family went to live among nomadic herders. When his father arrived at the Ethiopian border, he discovered Somalis in severe need of money transfer and set out to make it happen.
No one wanted a rapidly declining local currency. Thus the business model shifted quickly.
Instead, the company generated a double profit by charging a commission and operating a currency exchange service in its stores, which it continues to do today.
Getting money back to Somalia was often dangerous and forbidden in some places.
“You can manage to hide $200,000 yourself if you know the technique,” Duale remarked of people’s efforts to secrete cash.
Business in Somalia as a hurdle
Dahabshiil has evolved into an international business that employs cutting-edge technologies during the last four decades.
Working in Somalia, a failing state means danger is always present. In 2009, two workers were killed in an attack by the Islamist organisation al-Shabaab, forcing the company to close half of its 50 or so Mogadishu locations.
The company still carries cash hidden in cars on occasion. Duale believes that the company’s strongest defence is its local strategy.
“We are ‘money without borders’ – people need us. Customers see us as a part of them. We’re bringing money to them, not guns, so they will look after us,” he says.
Regulations as an expansion hurdle
Regulations were another roadblock to expansion. Abdirashid Duale encountered an unfamiliar method of doing business when he registered as a teenage sole trader in London’s East End, which has seen waves of immigration over the years.
He says, “I knew Somalis, I knew how to serve them, but I did not know about formality – in Burao you don’t need accountants, lawyers, or a bank.”
Despite his shaky English, he found an accountant, purchased a guide to doing business in 12 European countries, and began working seven days a week to untangle the red tape.
When al-Barakat, one of its Somali competitors, was shut down by the US following the September 11, 2001, terror attacks, Dahabshiil gained more customers.
Duale says that no money in Dahabshiil is used to fund piracy or terrorism, and he regularly cooperates with international organisations when they request it.