Somalia is located in the horn of Africa with boundaries to Ethiopia, Djibouti and Kenya. Somalia’s last full functional government collapsed in 1991. Since then Somalia has been ruled by transitional governments backed by the United Nations and international unions and now the Somali federal government.

Somaliland north part of the Somalia declared itself as separate sovereignty in 1992, although there is no country still recognized its sovereignty, similarly, Puntland; the north eastern regions of Somalia, established the semi- autonomous administration called Puntland state of Somalia in 1998. After the collapse of central government of Somalia, financial institutions destroyed, the central bank of Somalia was malfunctioning with no enough authority to manage the monetary system of the country.

The country’s cash management system became night mire, with no central management for the cash receipts of the country. The inflation reached at its peak with 30, 000 so. sh exchanged to 1$ in 2008 and the management of cash to businesses and day to day transactions become too risky and costly.

Somaliland launched new currency notes named Somaliland shillings in October 1994 to resolve financial disturbances from the rest of Somalia. In 2010 mobilemoneytransfer has emerged in the horn of Africa country, Somalia; the telecommunications companies operated in Somalia started the mobile money transfer service, Golis Telecom Company, hormuud telecom and telesom company covering the three zones in Somalia namely Somaliland, puntland and south central somalia.

Golis telecom covered mobile money transfer services named SAHAL SERVICE in Puntland state, telesom company covered Somaliland and called it ZAAD SERVICE and hormuud telecom covered south central Somalia named its service as EVC PLUS. The emergency of mobile banking in Somalia started a new era in the field of bank system in Somalia.

This new system has solved a lot of financial constrains faced the business and commerce in Somalia and started improving transactions and cash security in the country. Sahal service which is the mobile money transfer offered by golis telecommunication company has been launched in 2009 in all over puntland. This includes the major cities in puntland such as bosaso, garowe and galkacyo.

The service which is owned and offered by golis Telecommunication Company, the largest telecom company in the region, with more than 15000 active subscribers (2015) has been easily accepted by the community which highly suffered the malfunction of monetary system in the country. Sahal service in puntland offer the community to the following services: Money transfer.

Mobile paymentMobile banking and servicesMobile airtimeMobile remittanceMoney transfer service: Sahal service offered customers to transfer money from one to another, they can transfer from small fraction of amount ranging from 0. 1$ to unlimited us dollars. Golis Company charged this service initially to small amount of which is as follows: Golis later decided to keep all the services free of charge.

This service works as follows; the customer needs to deposit his cash amount to his mobile phone by visiting golis sales center. Later the customer can send the money back to other customers with sahal service where ever he is in Somalia. This service has largely been used by businesses and individuals for the transitions between the cities and regions and has been widely accepted by the community since it is cheaper than the normal remittances working in the region such as dahalshiil, amal or iftin.

This is the graphical representation of how sahal service works: Mobile payment (paybills): This is another service offered by the golis telecom company’s SAHAL SERVICE.

Mobile payment is also called merchant number and is intended to replace cash transactions between businesses and people. Golis customer has to get merchant number from golis sales offices and it is used for that business only, it cannot be used personal. You can get merchant number only if you have a running business with a name and location.

After you get merchant number, the customer will do payment through this merchant number. The merchant number does not charge the customers as well as the owners, it is free of charge. The merchant number is bounded by cities and regions and cannot cross across different cities.

If you wish to send money from one city to another for purchases, merchant number will not help you and will not work for that purpose instead you have to use sahal money transfer service. Merchant number offered by golis telecom has helped businesses to run their business with or without cash transactions. It increased the security of their transactions by keeping transactions with their merchant numbers history.

The merchant person will go to golis offices to get the transactions he made this year or this month or simply a specific customer. This has increased the reliability and confidence of the merchants and they are heavily relied on this service. This service has changed the dynamics of the business transactions in puntland and it fills the gap of securing business transactions and payments in which otherwise the government should have to deal with.

On the other side, there is a widespread believe that sahal service dominated the cash transactions in the country and if this service goes as it is now for many years there is a possibility that it will degrade the cash system of the country hence it should be regulated and concretely managed by the concerned government agencies.

Use of Paybills service from golis telecom is shown graphically below: Mobile banking system: Sahal service has an additional service called kaaftoon, this service connects your salaam bank account into your mobile with the help of sahal service.

The customer who needs to use this service should first have sahal service enabled in his mobile phone, then your salaam bank account can be tailored to your sahal service simply by asking salaam bank offices to do so. After it is being opened, you will be able to deposit and retrieve you money to your bank account.

Similarly, you can send and retrieve money from the other salaam bank account anywhere in the country. Kaaftoon services become the biggest nightmare for other competitor banks. It helped salaam bank which is co-owned by golis telecom to enter market tremendously and get a huge market share with the minimum amount of time. The community highly welcomed This service as it is a new service enabled with the latesttechnologyand removed the constraint of lining up the bank offices to deposit or withdraw cash your account.

The kaaftoon service works as follows; the customer should deposit cash money to his sahal service by visiting golis sales offices and depositing money to them then they will credit your sahal service account as per the requirement. Then inside your phone you can deposit the amount required to your salaam bank account and send money to other salaam bank accounts if required.

Similarly you can withdraw money deposited in your salaam account into your sahal service and use it. You really don’t require visiting salaam bank office or ATM machine to withdraw cash. The amount of money to withdraw or deposit using kaaftoon service is as follows; you can withdraw or deposit minimum of 10$, it will not accept below 10$. But you can withdraw and deposit as much as you need.

This gives the customers a huge flexibility of managing their transactions and business into their premises. Mobile airtime: Mobile airtime is also another feature which allows customers to get golis airtime from their sahal service, this service give customers the ability to get airtime to their mobile phones by using their sahal service, similarly they are allowed to give airtime to their friends and any golis subscriber.

Before sahal service come into existence, scratch cards, golis centers and agents used to give customers the airtime they need. Small amount of service fee are charged to the customers by the agents. But when sahal service begin to work all airtime work has shifted to the sahal service.

Still there are agents of airtime which help customers those do not have registered sahal service to get their required airtime but they use their agency within sahal service. Al though this shift of airtime paradigm lost jobs and services but the subscribers get the flexibility to manage their airtime.

Mobile remittance (taaj service): The mobile remittance service or taaj service has been included sahal service package in the year 2015. Taaj is a subsidiary company of a sis companies named HTG (hormuud, telesom and golis) and formarly known as BARAKAAT REDSEA COMPANY.

The company have been subsidized according to the locations and clan boundaries in Somalia. This gave birth to group of sister companies of HTG group. Taaj remittance belongs to HTG and it is supported by all the mobile banking systems of these companies viz SAHAL, ZAAD and EVCPLUS services. Taaj Remittance Company has been introduced in the Somali market in the year 2012, and has gained a large market share immediately, compelling the competitor companies with large market share to enter into the telecommunications company.

The gaint Somali remittance companies’, dahalshiil group and amal bank both entered the telecom company by forming SOMTEL and AMTEL companies respectively. The main aim of creating SOMTEL and AMTEL by dahabshiil and amal companies is the risk they faced from such technology as taaj company with the help of mobile banking systems such sahal service.

Somtel has been largely launched Somalia at large and has come with their mobile banking system named E-DAHAB. AMTEL Company has been launched in the year 2017 and it is still in its initial start up phases. Since the collapse of Somali government in 1991, Somali community has largely become immigrant in almost all over the world. Somali communities in different parts of the world use to send money in their families back home.

The banking system of the country collapsed and the transfer of money from abroad to the country become difficult and that time Somali remittance companies has emerged and take their role in transferring money between communities abroad and Somalis in Somalia.

Coming back to sahal service package, taaj service is one of the services supported by sahal service, it supports both local and international money transfer and it works as follows: The person should deposit the amount of money to send into his sahal service.

By using his sahal service, person should follow procedure accordingly and provide all the required information as seen graphically below: Challenges confronted sahal service in puntland: Introducing sahal service into the market met challenges which include technology related issues, reliability and money exchange business.

We will address these three challenges below and how sahal service survived from these two challenges. Deficiency of sahal service technology: The customer got caught by lack of knowledge from this new technology in which they feel a huge risk of their money. They didn’t have prior knowledge of such technology nor it is something they use to see.

This makes the service rigid and decreases its reliability and flexibility. Golis telecom company which is the owner of sahal service started the service as follows; the company run the service only to its employees initially, to check whether the service runs as planned and rectify errors if any.

This initially run of the service lasts for three months in which they send employee salaries, bonuses etc to this service, then the company opened the service to its customers by putting a lot of efforts to encourage customers the reliability, confidentiality and security of the service.

They put a huge amount of marketing money to introduce and convince the customers to the new service. Golis telecom established a huge lcd tv’s to many of its centers explaining how to use the service from technology point of view. Similarly they putadvertisementagencies such as TV’s, radios and newspapers explaining the same. This helped customers to understand the service and use it. Leter, sahal service customers started to increase each month.

Reliability of the service: Inutility, customers got suspicious about the reliability of the service, they didn’t convince to put their money in mobile phone and let it go. They believed the possibility that the company may collapse, or they misuse their money. Similarly since there is no strong financial system in the country they feel keeping their money with them is best policy.

Golis telecom survived this problem as follows; first of all the service was not only run in golis telecom or in puntland but all across Somalia. ZAAD and EVC PLUS have been introduced in hargaisa and Mogadishu respectively. The introduction of the similar service across the country convinced the customers that the service has its demands now and may be it is the time to keep your money in mobile phones.

The other asset which helped the company to convince the customers is the customerloyaltyto the company. The company has made a clean image from fraud and financial mismanagement during its existence and the customers feel it that way and it increased its reliability. Similarly golis telecom run a lot of sales offices to handle sahal service customer care and customer issues in which it poured a huge money to immediately retrieve customer money in cash in case needed.

This step greatly influenced the mindset of the customers and increased their confidentiality since their money is available 24/7 in cash or in the mobile phone. Money exchange businesses: Merchants from money exchanges business who do currency exchange from dollars to Somali shillings and vice versa saw sahal service as their biggest threat.

These group of business people immediately felt that if this service runs successfully all those exchange businesses will not live peacefully side by side instead sahal service is the end money exchange business. This is true in a way that no one will need to go exchange business to do exchanges from dollar to Somali shillings and vice versa since sahal service will do this and many more services.

These group have tried to ruin the service and publicly misinform the community by spreading negative propaganda about the service and mostly aligning the service with financial fraud. Golis telecom company stuck to its plan of fighting and convincing the community the services offered by sahal service and its benefits.

Their main defence strategy was security and convinced the community golis is the right place to secure their money instead of holding and incurring security costs similarly since there is no fully working financial banks both public and private there was a huge need of financial services which is better than the current unstructured financial systems and services. This is the place where sahal service got the attention of community as whole.