First somali bank prospectus 2012

First Somali Bank is a new commercial bank starting in May 2012 in Mogadishu, Somalia. It ventures to capture as its customers the middle- and high-income individuals, the businesses, the government, and foreign entities like NGOs.

FSB is introducing modern banking practices to the country, which hasn’t had commercial banking system operating in the country for twenty years. The products include Islamic loan products, a debit card, agency banking, mobile and internet banking and international money transfer. FSB is also the marketing agent for Takaful Somalia from the same group and support also the efforts of Somalia Wireless a premium quality V-SAT internet provider for Mogadishu.

FSB operates according to Islamic Banking rules. This means that on the loans the bank operates more like a building developer and a trading house rather than a traditional commercial bank. A reputable Sharia Supervisory Board guarantees bank’s adherence to the rules of Islamic Finance.

Somalia has been in a very volatile political situation for over 20 years. This affects the legal environment. However, honor-based agreements, customary law, and traditional court system provide legal framework for operations.

The Transitional Federal Government is working on enacting legal framework to govern businesses and banking operations. It is reviving Central Bank of Somalia. The banking law is being fashioned after the strict international banking regulations with the help of various Central Banks.

Somalia has not had any kind of commercial financial system for over twenty years.

Teaching customers to use modern banking products will take some time.

Since we are one of the firstcommercial bank in the Somali market we will be able to build brand loyalty. First Somali Bank intendto set the best practicesas requested by the international compliance rules. The bank has a very experienced management team.

First Somali Bank bases its operations in modern computing systems. This allows the bank to operate efficiently. It also helps FSB to offer modern products like agency banking, smart card based debit cards, mobile and internet banking and effective international money transfer. The banks runs a system based on biometric data to identify clients. The bank is planning to set up 100banking agents using POS system in the next 12 months in Mogadishu.

First Somali Bank has designed a strong business strategy to enable it to gain a strong position in the market. The Bank’s strategy is based on the following basic elements:

1. Appointment of high caliber staff with extensive experience in Islamic banking and in banking practice

2. A positive and effective attitude towards market research and business intelligence in pursuit of a comprehensive knowledge about the characteristics and requirements of the market

3. Launching of marketing initiatives in the different jurisdictions of the region and using the state of the art technologies to enable them

4. Stressing on up-to-date, innovative and outstanding services which will in turn create a distinctive and privileged image for the Bank within Somalia

5. Designing and developing a comprehensive range of banking products and services, which will be regularly updated and upgraded in response to the customers’ requirements in tandem with the latest technologies and practices in the Islamic Banking Industry

6. Complete reliance on IT and modern banking technologies including the development of the investment and finance services

7. Creating and updating a carefully designed and gradually applied penetration plan for increasing presence in the market.

First Somali Bank offers a Islamic savings and current accounts. The savings accounts offer profit sharing and can be specialized in specific sectors of the economy, upon the client wish, while current account is for everyday money usage. FSB Islamic loan products are geared towards larger projects, like building and renovation financings. Trade Financings are also available to facilitate importing goods to the Somali market.

-The bank can finance new real estate (property development)by Istina,

-Financing ofold real estate isset up throughDiminishing Mushakara,

-agriculture productionis financed bySalam contracts,

-Equipments arefinanced throughMurabaha Purchase Order financing,

-BusinessExpertiselike running a restaurantis financedby Mudaraba financing,

.

Clients can also invest in safe fixedreturn products like Treasury Murabaha deposits accounts or by investing together with the bank in some of its associated business (Musharaka) like Islamic finance operator (Takaful), which are more risky but carry more profit rates if it is successful.

The bank’s aim is to move Somalia towards modern and more secure cashless society together with the mobile phone and internet-based banking facilities.

The remittances to Somalia are estimated to be around USD 2 Billion every year. This provides a huge opportunity for FSB to step in and offer the international money transfer (IMT) services. The bank has strict “Know-Your-Customer” and “Anti-Money-Laundering” policies. They are fashioned to satisfy the demands of the foreign governments to allow the bank to operate IMT.