Qaran Express, arguably the second largest hawala (money transfer) company and popular with the Somali diaspora, has declared failure.
In a letter circulated and also published on the company’s web site www.qaranexpress.com on February 16, its chairman Abdulkadir Hashi Jumale announced that the Dubai-headquarters firm, with many transfer and banking businesses in and outside Somalia, had failed.
"Qaran Express is going to stop services to the public," wrote Mr Jumale.
"It encountered serious financial problems." Hawala is a value or debt transfer system that operates primarily on trust.
Mr Jumale said that the company would meet the required wounding up procedures including safeguarding depositors’ money, company assets and stakeholder interests.
Qaran Express was founded in 2005 and by 2007 it expanded its operations, especially after merging another hitherto big hawala company, Global Express.
The enlarged Qaran Express became second to Dahabshiil, the largest money transfer company globally.
The operations of Dahabshiil, Qaran Express and other hawala companies grew after the United States applied sanctions on rival Al-Barakat in 2001, after it accused it as contributing funds to Al-Qaeda, an organisation blamed for the 11 September 2001 attacks on the US.
Some sources point fingers at shareholder squabbling over resources as a source of Qaran Express' financial and administrative problems.
Many attempts to save the company including take overs by other companies have failed.
Money transfer is huge business in Somalia as Diaspora Somalis are estimated to remit nearly $2 billion per year mainly to support relatives at home and for investment.
The hawala business proliferated after the collapse of the central government in Somalia in early 1991.