After a few panels and talks on mobile money at Afrikoin, we had the opportunity to listen to Gianluca Iazzolino, a researcher from the University of Edinburgh. Gianluca studies the way Somali people deal with mobile money, particular as a people who are constantly moving – whether as refugees or traders of gold and other goods that can be exchanged in the surrounding East African countries.

The Unique Somalian Context

To understand how Somali people interact with money, Gianluca suggests reading Charles Stross’s “Neptune’s Brood” , a sci-fi book whose main hero is a banker. The concepts of fast, slow and medium money used in the book can be a first step to understanding Somali behaviour: “Fast is every day cash, medium is investments in infrastructure and slow is money that can only be transferred once the sender, receiver and a bank have all registered the trade” (forum).

Martin pasquier innovation is everywhere nairobi kenya Somali recent history gianluca iazzol afrikoin mobile money hawala dahabshiil mpesa

A timeline of recent Somali history

Gianluca led his research by exploring Eastleigh, a district of Kenya’s capital Nairobi where Somali settled, and  describes it as “a crossroads of flows, from China to the States, from Dubai to the different diasporas of refugees and merchants, and a paradise for the informal economy”.

A Comparison between Hawala and MPesa

The hawala, he explains, is a concept of informal mobile money similar to MPesa, Kenya’s mobile money. It is rather divisive,  seen both as a source of terrorism financing but also as a “lifeline” that allows a threatened population to keep money safe. But there are differences between hawala and MPesa. While MPesa is good for small amounts of money, it requires an ID, and is mostly limited to Kenya. The hawala on the other hand is multicurrency, international, without ID requirements and permits the exchange of large amounts of money.

Martin pasquier innovation is everywhere nairobi kenya somali eastleigh nairobi kenya diaspora afrikoin gianluca iazzolo mobile money mpesa hawala

The Somali district of Eastleigh in Nairobi, Kenya

Dahabshiil is the most famous transfer company using the hawala, allowing its users to send and receive money. They are used by NGOs operating in Somali and the UN, so there’s little risk that it can be forced to close as their predecessors have been.

The differences between MPesa, the Kenyan mobile money, and hawala, on the Somali side, is also cultural, says Gianluca. The former is perceived within the Eastleigh communities as a service for women and students to manage their daily expenses, while the latter is considered a more “masculine” service as it is anonymous and ideal for larger deals.

Concluding the first part of his research, Gianluca stresses that the Somali people live in a perpetual state of multiplicity and mobility as they don’t know what is going to happen tomorrow. Their activity revolves “around the pursuit of resources that allow crossing borders, boundaries and thresholds, such as passports, ID documents, UNHCR mandates and hard currencies”. 

This is an impressive glance at this angle of our contemporary world. Gianluca will spend a month in Somali and in surrounding East African countries later on so we’ll stay tuned to his research work.

Martin Pasquier