Mogadishu, Somalia – The Central Bank of Somalia has taken a groundbreaking step toward expanding access to finance by officially licensing seven Non-Deposit-Taking Microfinance Institutions (MFIs) for the first time in the nation’s history. The move marks a major milestone in Somalia’s journey to build a more inclusive, diversified, and resilient financial system.
For decades, access to credit and formal financial services has remained out of reach for many Somalis, particularly small business owners, rural communities, and women entrepreneurs. The introduction of these licensed microfinance institutions is set to change that dynamic by offering flexible financial solutions without the traditional requirement of deposit collection, allowing them to focus entirely on lending, business development, and community support.
The Central Bank’s decision reflects its growing commitment to modernizing Somalia’s financial landscape. It also comes at a time when the country’s private sector is emerging as a vital driver of job creation and economic recovery after years of instability. By regulating microfinance operations, the bank aims to ensure transparency, protect borrowers, and promote responsible lending practices.
Analysts view this as more than just a regulatory milestone — it’s a signal of confidence in Somalia’s economic direction. Small traders, youth-led startups, and farming cooperatives are expected to be among the first beneficiaries, as microfinance services extend into regions where commercial banks have limited presence.
As the newly licensed institutions begin operations, optimism is high that they will unlock new opportunities, helping thousands of Somalis transform ideas into livelihoods and gradually narrowing the gap between the formal and informal economies.