FIRST SOMALI BANK PROSPECTUS
EXECUTIVE SUMMARY
First Somali Bank is a new commercial bank starting in April 2012 in Mogadishu, Somalia. It ventures to capture as
its customers the middle- and high-income individuals, the businesses, the government, and foreign entities like
NGOs.
FSB is introducing modern banking practices to the country, which hasn’t had commercial banking system
operating in the country for twenty years. The products include Islamic loan products, a debit card, agency
banking, mobile and internet banking and international money transfer.
FSB will operate according to Islamic Banking rules. This means that on the loans the bank operates more like a
building developer and a trading house rather than a traditional commercial bank. Shariah Supervisory Board
guarantees bank’s adherence to the rules of Islamic Finance.
THE CHALLENGE
Somalia has been in a very volatile political situation for over 20 years. There hasn’t been an effective central
government other than in a semi-autonomous Somaliland and Puntland regions. This affects the legal
environment. Currently there are practically no laws governing running business or operating a bank. However,
honor-based agreements, customary law, and traditional court system provide some legal framework for
operations.
The Transitional Federal Government is working on enacting legal framework to govern businesses and banking
operations. It is reviving Central Bank of Somalia to be the controller of the emerging banking system. The banking
law is being fashioned after the strict Kenyan banking regulations with the help of Central Bank of Kenya.
Somalia has not had any kind of commercial financial system for over twenty years. The only financial institution
has been international and domestic, trust-based money transfer system called “Hawala.” It is run by two entities,
Dahabshiil and Al-Barakat. Teaching customers to use modern banking products will take some time.
THE STRENGTHS
One of the biggest strength of First Somali Bank in the Somali market is that it is one of the first commercial banks
to start. That allows the bank to set the best practices for the whole industry. The bank has a very experienced
management team.
First Somali Bank bases its operations in modern computing systems. This allows the bank to operate efficiently. It
also helps FSB to offer modern products like agency banking, smart card based debit cards, mobile and internet
banking and effective international money transfer.
THE PRODUCTS - ISLAMIC BANKING PRODUCTS
First Somali Bank offers a Islamic savings and current accounts. The savings accounts offer profit sharing, while
current account is for everyday money usage.FSB Islamic loan products are geared towards larger projects, like building and renovation loans. Profit-sharing
trade loans are also available to facilitate importing goods to the Somali market.
AGENCY BANKING, MOBILE BANKING AND CAMELCASH DEBIT CARD
Agency banking is a new form of offering banking services in a wide area. Instead of a traditional bank branch, the
banking agent provides the banking services at his own business. This model has been proven to be very costeffective.
It allows bank to reach the majority of the population. Each agent has a banking terminal, which allows normal banking transactions, including deposits, withdrawals, money transfer, mini statements, etc.
Camelcash debit card is the facilitator for the agency banking. Smart Chip based card is used at the agent with
biometric (fingerprint) recognition device. This assures that the right customer is using the card and also
circumvents the need for the customer to sign or to remember PIN numbers.
The bank’s aim is to move Somalia towards modern and more secure cashless society together with the mobile
phone and internet-based banking facilities.
INTERNATIONAL MONEY TRANSFER
Recently the Hawala system has run into troubles, because of helping to transfer money to the Islamist rebel group
Al-Shabaab. The United States have banned the Hawala companies from operating in America. The remittances to
Somalia are estimated to be around USD 2,000,000 every year. This provides a huge opportunity for FSB to step in
and offer the international money transfer (IMT) services. The bank has strict “Know-Your-Customer” and “AntiMoney-Laundering” policies.
They are fashioned to satisfy the demands of the foreign governments to allow the bank to operate IMT between their respective countries and Somalia.
THE MANAGEMENT TEAM
The CEO, Azzam Falck has been in the international financial industry for over twenty years, including starting an
Islamic Bank in Qatar and working as an investment banker in Hong Kong. The Director of Marketing and Business
Development, Petteri Bergius has nearly thirty years of marketing and sales experience in financial, telecom, and IT
industries in the USA, the UK, Kenya and Finland.
The Head of Operations, Samuel Gathuci has run several branches at Equity Bank in Kenya, including one in Somalimajority part of Nairobi, Eastleigh.
The Head of IT, Edmund Terer has been working in various operational and managerial positions at the IT departments of Kenyan financial institutions.
