Although Somalia has the fourth lowest mobile penetration rate in the world, it ranks 1st and 3rd globally in the percentage of adults using mobile phones to pay bills and send/receive money, respectively. This somewhat contradictory outcome is mainly driven by Somalia’s largest telecom company: Hormuud Telecom Somalia Inc. or HORTEL. In an effort to respond to the plummeting security and economic conditions in Somalia, HORTEL launched ZAAD mobile banking services through which individuals could transfer money to other subscribers, facilitating shopping and paying for utility and telephone bills without carrying cash. This has proved to be an attractive option for Somalis who have been facing worsening security conditions over the past decade.
Furthermore, ZAAD has made it possible for hundreds of thousands of Somalis to receive remittances from their family and friends abroad, therefore saving lives in this conflict-torn country. With more than $1 billion USD in value per year (more than 70 percent of Somali GDP), remittances have been the backbone of the war-torn economy. Without ZAAD mobile phone payment service, the effect of these remittances would be minimal. ZAAD has made it possible for remittances to be transferred across the country with a push of a button and with no risk for the sender or receiver, making it possible for thousands of people across Somalia to gain access to basic food items and healthcare.5
When it comes to mobile technology and mobile banking, Russia and Somalia are diametrically opposite to each other. Despite being one of the poorest countries in the world, having one of the lowest cell phone penetration rates and lacking the involvement of government or financial industry, Somalia has one of the highest mobile financial transaction rates in the world. By contrast, although Russia surpasses Somalia in a heartbeat in terms of income, technology, and education, its mobile banking rates have remained at extremely low levels even in the face of government support. It seems that while technology and regulation have minimal roles in creating these opposite outcomes, cultural view toward cash, security conditions on the ground, and the trust of the public in the secureness of mobile banking technology are the main driving factors. Therefore, alongside technological and regulatory requirements, countries that are contemplating the possibilities and potentials of mobile banking in their economies need to be mindful and pay closer attention to the specific local conditions and cultures that could hinder or promote the advancement of mobile banking in their economie