Shaqodoon and SomBank Collaborate to Empower Somali Entrepreneurs
Access to finance is a significant barrier for many young entrepreneurs, and this can be particularly challenging in regions where traditional financing mechanisms are limited. However, with the support of SomBank and Shaqodoon, Somali youth entrepreneurs will have access to new opportunities to develop their businesses and contribute to the economic growth of their communities.
Shaqodoon Organization and SomBank, two prominent institutions, have forged a strategic alliance through a Memorandum of Understanding (MOU) to empower existing and emerging entrepreneurs in Somalia. This partnership builds upon their successful cooperation in 2018, when they joined forces to provide Sharia-compliant loans to Shaqodoon’s beneficiaries. The new initiative aims to expand their reach and support a wider community of inspiring Somali entrepreneurs.
SomBank, a fully-fledged Shari'ah-compliant bank, offers a comprehensive range of banking services and possesses a substantial customer base. With years of experience in Somalia's financial sector, SomBank brings valuable expertise to the collaboration.
Providing Financial and Technical Services
The primary objective of this partnership is to facilitate the provision of innovative financial and technical services to Somali youth entrepreneurs who face challenges in accessing traditional financing mechanisms. Shaqodoon and SomBank seek to harmonize their efforts and fulfill their social responsibility by supporting small business owners, marginalized women, and aspiring emerging entrepreneurs. This collaboration encompasses a blend of Sharia-compliant loans, needs-based training, and business development services.
The partnership welcomes SomBank's involvement in the Tarmiye Fund - a revolving youth fund established in 2019 - that offers investment opportunities to young entrepreneurs with viable business ideas. It provides various funding options, including grants, mark-up-free loans, a combination of grants and loans, as well as equity.
Expanded Collaboration and Targeted Support
Under this partnership, SomBank will primarily focus on providing Sharia-compliant loans, while Shaqodoon will oversee the administration of the grant components of the fund. Additionally, SomBank will contribute its own matching revolving funding, equivalent to Shaqodoon's loan, exclusively for beneficiaries accessing Shaqodoon's services. To ensure responsible investments, SomBank will actively participate in the entire investment process as an investment committee member, conducting thorough due diligence on program participants.
Shaqodoon's role includes depositing revolving loan funds into the jointly established account and managing the grant components of the fund. They will also take the lead in preparing and training youth in entrepreneurship and business plan development, establishing and leading the investment/advisory committee, and providing ongoing mentorship and support to ensure the long-term sustainability of businesses.
Potential for Development
In addition to the Tarmiye Fund, the partnership between Shaqodoon and SomBank extends to collaborative efforts on joint applications for future projects aimed at supporting youth and women entrepreneurs. These initiatives, further the mandates of both partner institutions and contribute to the advancement of Somalia's entrepreneurial ecosystem.
The partnership between Shaqodoon and SomBank not only represents a significant step forward in supporting Somali entrepreneurs and fostering economic growth, it is a testament to the power of partnerships between private sector organizations and non-profits to promote innovation and development. By leveraging their combined expertise and resources, SomBank and Shaqodoon are well-positioned to create a more inclusive financial system that can help generate job opportunities, drive economic growth and promote sustainable development.