May 21, 2019

State forces money service for African immigrants to close

PORTLAND – The closing of Portland’s last known hawala, or money-transfer service, means hundreds of African immigrants are without the only convenient, reliable way to wire money to relatives.

Dahabshiil was forced to close two weeks ago after the state Office of Consumer Credit Regulation notified the company’s Ohio headquarters that it needed a license and a $100,000 insurance bond to protect consumers from fraud.

Isak Jama Warsame, director of Dahabshiil’s American operations, said the company decided to discontinue service because Maine’s small Somali community cannot support the $6,000 annual cost of a $100,000 bond.

“We would have to charge more to make a profit, but the community cannot afford it,” Warsame said.

Under the hawala system, many African and Asian immigrants make cash payments to local agents, who subtract a commission and call or e-mail other agents. The money is then delivered almost immediately.

States that have Somali populations of at least 20,000, such as Ohio and Minnesota, can support such licenses, Warsame said. The Portland Dahabshiil, however, only processed about $60,000 each month.

Different parts of the company network share a 5 percent commission on each transaction, most of which are in the $50 to $100 range.

“It’s not profitable, but it’s a matter of survival for people,” Warsame said. “It means someone’s relative will not die of hunger.”

Will Lund, director of the consumer credit office, said insurance regulations are designed to protect consumers. “If you give money to somebody, we need to know … there is money in the bank,” he said.

Dahabshiil was one of two hawalas operating in Portland. The Justice Department shut down the other operation, Al-Barakaat, because of a suspected link to the al-Qaida terrorist network.

Police found no such connection to Dahabshiil, and the business reopened after a brief closure.

Dahabshiil’s local operator, Habib Munye, said dozens of people now have no convenient local means of sending money home.

“Every day, people come in here and ask me [how] they will send money, and I don’t know,” said Munye, who still operates a small business selling clothing, perfume and calling cards.

Munye said his business sent money regularly to Somalia, Sudan, Kenya and Ethiopia.

“It’s much more difficult now,” said Somali native Abdi Sharif. “I’ll have to send it through another state.”

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