 |
Central Bank delegation secures foundational partnership with Taiwan and technical support from African counterparts at International Association of Deposit Insurers conference
A delegation from the Central Bank of the Republic of Somaliland, led by Deputy Chairman Hamse Khayre has secured critical partnerships to establish a national deposit insurance system, a foundational step toward strengthening the country’s banking sector. The progress was made at the International Association of Deposit Insurers (IADI) Africa Regional Committee conference, held in Mombasa, Kenya, from June 16-19, 2025.
The event, co-hosted by the Kenya Deposit Insurance Corporation (KDIC), focused on building resilient financial safety nets across the continent. For the Somaliland team, the objective was clear: learn from established systems and forge the alliances needed to build its own.
“Confidence in banking begins with trust—and trust begins with strong institutions like deposit insurance,” said Deputy Chairman Hamse Khayre, who led the Somaliland delegation. “This forum brought together Africa’s financial safety net leaders to tackle the big questions: how to prepare for crisis before it strikes, and how to protect depositors with confidence.”
A Foundational Partnership with Taiwan
The most significant outcome was a bilateral meeting between Deputy Chairman Khayre and Ms. Yvonne Fan, an IADI Board member and Executive Vice President of Taiwan’s Central Deposit Insurance Corporation (CDIC). The discussion focused on direct collaboration to create a Deposit Insurance Unit within Somaliland’s Central Bank.
“Meeting with Taiwan’s CDIC Executive Vice President Yvonne Fan was a turning point in our journey to establish a unit that protects our people’s savings,” Khayre stated, emphasizing the breakthrough.
This financial collaboration deepens the existing relationship between Taiwan and Somaliland. “The shared values between Taiwan and Somaliland continue to open new pathways, not only in diplomacy but also in financial sector development,” Khayre noted.
The delegation also held productive sessions with deposit insurance agencies from Nigeria, South Africa, Kenya, Ghana, Namibia, and Turkey to discuss best practices and potential technical support.
“We are not starting from scratch,” Khayre reflected. “With the right partners, Somaliland can design a deposit insurance system that is both homegrown and globally respected.”
“From Ghana to Namibia, South Africa to Turkey — every meeting was a reminder that financial resilience is not built in isolation, but through shared experiences and mutual support,” he added.
Why Deposit Insurance Matters for Somaliland
Establishing a deposit insurance system is a core part of the Central Bank’s strategy to modernize Somaliland’s financial architecture. For an emerging economy, such a system encourages citizens to move their savings from informal methods into the regulated banking system, providing banks with a stable capital base for lending and investment. The psychological impact cannot be understated – when people trust that their deposits are protected, they participate more actively in the formal financial system.
The global standard-bearer remains the US Federal Deposit Insurance Corporation (FDIC), established in 1933 following the Great Depression. The FDIC’s guarantee of deposits up to $250,000 per account has virtually eliminated bank runs in America for over nine decades. When Americans see the “FDIC Insured” sign, they know their money is safe regardless of economic turbulence. This confidence translates directly into economic stability and growth.
For Somaliland, the need is particularly acute given the territory’s unique position. Its lack of formal international recognition creates barriers that force reliance on traditional hawala money transfer systems for international transactions. These networks, while historically important, typically charge fees of 8-15% compared to the 1-3% seen in standard international banking. Building robust, internationally recognized financial frameworks represents a pathway toward overcoming these barriers and reducing transaction costs for citizens and businesses.
The territory has seen significant growth in mobile payment systems, with services like ZAAD and eDahab becoming widely adopted. However, these innovations exist alongside regulatory challenges that the Central Bank continues to address as part of its broader modernization efforts.
The Somaliland delegation included Mohamed Abdullahi Ali (Director, Financial Institutions Supervision), Abshir Abdi Mohamed (Director, Monetary Policy), and Mahmoud (Senior Advisor, Bank Deposit Insurance). Their participation reflects a targeted effort under the leadership of Central Bank Governor Abdinasir Ahmed Hirsi to implement comprehensive financial reforms.
“Deposit insurance isn’t just a policy—it’s a promise. And Somaliland is preparing to make that promise to its people,” Khayre declared.
As the delegation returns to Hargeisa, the focus will shift from diplomacy to policy implementation. The partnerships forged in Mombasa provide a roadmap for a system that could strengthen Somaliland’s banking sector while building the institutional credibility needed for broader economic development.
