Mogadishu – The Central Bank of Somalia (CBS) has officially launched the licensing process for Microfinance Institutions (MFIs), marking a critical step in strengthening the country’s financial sector and expanding access to credit for low-income households and small businesses.
In a public notice issued on 6 June 2025, the CBS announced that all MFIs currently operating in Somalia must apply for official licenses within six months—by 6 December 2025—to continue offering microfinance services legally. New entrants must also follow the same process and meet the regulatory requirements set by the Bank.
This move is part of Somalia’s broader financial sector reform agenda aimed at enhancing transparency, consumer protection, and financial inclusion. The CBOS emphasized that the new licensing framework will bring unregulated microfinance actors under formal oversight, helping to curb illicit practices and promote stability in the industry.
Licensed MFIs will be expected to adhere to financial soundness standards, client protection principles, and regular reporting obligations. The Bank also highlighted its commitment to supporting institutions through the transition process with technical guidance and regulatory clarity.
Microfinance has long served as a lifeline for many Somalis who lack access to traditional banking services. By formalizing the sector, the government hopes to build public trust and enable more equitable economic growth.
The Central Bank urged all relevant stakeholders to begin preparing their documentation immediately and warned that unlicensed operations beyond the deadline will face legal and administrative consequences.