The role of SomBank on Entrepreneurship development in Somalia
Entrepreneurs shape the financial destiny of nations by creating wealth and prosperity, providing products and services, and generating job opportunities and taxes for governments. This is why entrepreneurship is closely related to a country’s financial and economic growth. Entrepreneurs transform ideas into financial opportunities through innovations, which are considered to be a major source of competitiveness in an increasingly universalizing global economy.
Somalia is recovering from raging civil war and instability. This recovery process is paving the way for a large number of people to join the country’s entrepreneurship ecosystem and create a new trench for many graduates to craft innovative business ideas.
The question that must be answered is how entrepreneurship in Somalia can be stimulated? This is more than just a theoretical question for SOMBANK a Shari’ah compliant commercial bank launched in 2019 and approved by the Central Bank of Somalia (CBS) under law No. 130 that focuses on business solutions to end poverty. The owners of the bank believe that competing businesses are the key to ending the country’s poverty and growing such businesses begins with entrepreneurs: this process can be possible only if the banks and financial institutions encouraged to the new emerging entrepreneurs which can be refined and developed systematically among the present youth.
The importance of entrepreneurship in today’s economic climate cannot be denied. It introduces a critical component of dynamism, particularly in an economic system. Entrepreneurs are often seen as national assets that are motivated and rewarded to the fullest possible extent because they contribute to innovation, jobs and improving conditions for a thriving society.
The newly established Sombank is pushing and encouraging young Somalis to start their own businesses or undertake projects that will increase the role of financial institutions in the country’s economic growth, and the Board has now designed the bank to meet the need for financial assistance for startups.
There is no objection that banking activities reflect their unique role as the starters of growth in any economy. Sombank has specialized to always play an important role in the growth and development of entrepreneurship in the country. The bank plans to launch microfinance to finance startups, in addition to providing financial assistance, the bank will also provide valuable inputs to support and promote their enterprises from ideation to companies as well as youth empowerment in terms of sports and facilitate entertainment platforms for them.
The role of Sombank in developing entrepreneurships is divided into the following categories.
It’s been one of the main reasons why the bank was created in the first place. Roles such as accepting deposits, safekeeping assets, but more importantly providing investment and advances make the bank a key component of growth. Sombank provides security for the customer’s money and at the same time gives entrepreneurs the opportunity to use their deposits to borrow more money in order to run their enterprises without any hassle. A good payment system is in place which is essential for the efficient functioning of the economy. And with the advancement of technology, the speed of service has been greatly improved.
With smartphone adoption and the growth of digital banking with T-plus wallet is expected to significantly reduce the cost of starting/doing business tremendously. The bank looks to provide flexible, user-friendly services that customers can access via mobile, online, and in branches To realize this ambition, SomBank recently selected the full front-to-back Temenos Islamic Banking platform, which combines the market-leading capabilities of Temenos Infinity and Temenos Transact, and will enable the bank to develop customized products in line with Islamic rules
This will greatly help the entrepreneurs in modern days. It is also very useful for those who are working business on foreign soil.
The bank, along with sister company of Tawakal Money Transfer also offers instant remittance service, a service in which money is transferred to any part of the world on behalf of bank clients. With bank playing this crucial role, this has now become a very important part of promoting entrepreneurial development.
Sombank has already made significant investments in fixed assets in Somalia in the form of commercial buildings developed in the capital, Mogadishu, Garowe, Galkayo, Galdogob, Bossaso and many more of such an investment are planned.
Not all entrepreneurs come from a sound financial background. Most are needed initial financing through Shari’a compliant modes of investment in order to generate capital to start their venture or enterprise. It is self-explanatory, but without funds, entrepreneurs cannot grow, and this is where Sombank play a significant role in the lives of entrepreneurs. Once an enterprise or business is set-up, and then come the important part incubation and investment.
Entrepreneurs have to pay in advance to service providers. The bank will help provide the capital assistance that may become the lifeline of the companies. Apart from that, the bank will also provide a financial review on a regular basis as a regulator or middleman’s role in connecting the business.
“Although we are a relatively new bank, Sombank has huge ambitions to play an important role in rebuilding the country’s economy, financial infrastructure and promoting youth employment aiming to connect people with huge pockets to people with great ideas. To take our role in the country’s economic development, we built great platforms to advise and suggest young entrepreneurs invest their money on beneficial stocks or commodities to earn more and bring revenues at the country’s disposal” Said by Grad Khalif Noor, CEO of Sombank.
Since Sombank has a professional and specialized status, the bank is in a strong position to advise entrepreneurs on sustainable investment lines by analyzing the pros and cons of each investment as well as managing clients’ investment. This is one of the major roles of the bank in the development of entrepreneurs as many enterprises/companies fail to succeed due to wrong investment decisions, mismanagement of funds, insufficient capital, and poor planning.
Regardless of whether they are pioneers or an affiliate, entrepreneurs need support, training and mentoring, they need access to finance and markets and improvements in the local enabling environment, so to pave them the way and help them turn their idea into a business, Sombank with its sister company Tawakal money transfer has established T-Hub; a center supports youth with innovative projects by providing essential support consisting of facilitating connections, internships, coaching and competitive investment in innovation activities for new innovative startups with a developer mindset.
T-Hub focuses on promoting R&D-based education in collaboration with academia, educational institutions and local business communities Supporting Somalia’s young generation in designing and implementing progressive and evidence-based projects.
The bank will remain crucial to the growth and advancement, in addition to the bank’s operations offer a rock-hard backing which is capable of entrepreneurs in profitable and viable ventures.
This will be essential to the survival and growth of the nation’s entrepreneurial environment.