After the collapse of Somalia’s central government in 1991, no genuine Somali currency has been in circulation since. With no central bank printing money, special interest groups began printing their own currencies, flooding the market to target specific regions and undermine local economies.
Hormuud capitalized on this situation by creating EVC Plus, Somalia’s first mobile money transfer service. This innovation allowed users to buy and sell goods, and pay for services using their phones, eliminating the need to carry large amounts of Somali Shillings and reducing the risk of robbery.
In exchange for hard currencies from Somali citizens, Hormuud provides U.S. dollars generated on a screen—unregulated by the government and not backed by any tangible assets. This system allows Hormuud to create millions in digital dollars (E-Dollars) out of thin air.
This unregulated financial infrastructure has also facilitated the activities of Al-Shabaab, a terrorist organization in Somalia. Al-Shabaab has used Hormuud’s services to extort citizens and conduct operations/Business anonymously.
The chart below shows a direct correlation between Al-Shabaab’s rise in influence and wealth and the growth of Hormuud’s telecommunication services in Somalia.
BY:-Ayub Khalif.