First foreign bank opens in Somalia in decades

A leading Turkish bank, Ziraat Katilim, has opened a branch in Mogadishu, becoming the first foreign bank to operate in Somalia in over a half-century, officials said.

All foreign banks closed down in 1970 when the Somali government nationalized the banking system.

The Central Bank of Somalia (CBS) said the operationalization of the first foreign bank in Somalia will boost the financial sector in the country by increasing economic opportunities and trade between the country and its trading partners.

“The new branch of Ziraat Katilim Bank in Somalia is expected to offer a wide range of corporate banking services to businesses, international institutions, and development partners,” the Somali apex bank said in a statement issued in Mogadishu.

The CBS in July 2022 granted two operating licenses to two international banks — Ziraat Katilim Bank and Egypt’s Banque Misr — following an extensive application process.

Ziraat Katilim is a state-owned participation bank, a member of the Ziraat Finance Group, which operates in 20 different countries with 15 subsidiaries and 27 branches abroad.

Despite the decades-long civil strife in Somalia, the business sector has thrived in certain areas such as telecommunications, and the country has domestic, private banks. But the conflict discouraged significant foreign investment in Somalia.