The Central Bank of Somalia (CBS) has formally licensed 15 commercial banks, a step aimed at standardizing supervision and building a more credible financial system. The approvals cover 14 domestic banks and one international lender, following the completion of the regulator’s licensing and evaluation process.
The expansion brings a larger, regulated base of institutions under CBS oversight, part of ongoing efforts to tighten entry rules, improve transparency, and support stability in a sector long dominated by informal finance. Analysts note that clearer regulatory frameworks can encourage credit growth, facilitate payments, and enable financial development in markets where trust and consistent oversight have historically been limited.
Licensed Banks
The newly licensed institutions include: Amal Bank Ltd., Amana Bank, Agro Africa Bank, Bushra Business Bank, Dahabshil Bank International, Daryeel Bank, Galaxy International Bank, Idman Community Bank, International Bank of Somalia (IBS), MyBank Limited, Premier Bank, Salaam Somali Bank, Sombank, Ziraat Katılım (Turkey), and Banque Misr (Egypt).
Ziraat Katılım becomes the first international bank to operate in Somalia in more than 50 years, while Banque Misr has also received regulatory approval to enter the market. Domestic players such as Amal Bank, Salaam Somali Bank, Premier Bank, IBS, and Dahabshil Bank International continue to dominate.
Sector Growth and Financial Performance
Somalia’s banking sector has undergone rapid expansion and modernization in recent years. Total banking assets surpassed $2 billion by late 2025, up from $415 million in 2018, while the industry maintained a capital adequacy ratio of 19% and collective net profits of $9 million.
Remittances remain a major driver of the sector, exceeding $6.2 billion annually, with an increasing share now flowing through regulated banks rather than informal channels.
Technology and Payment Infrastructure
All licensed banks are connected to the National Payment System (NPS), which includes Real-Time Gross Settlement and Automated Clearing House platforms that processed more than $1.9 billion in 2024. The Somali Instant Payment System (SIPS), launched in early 2025, enables 24/7 real-time transfers between banks, mobile wallets, and point-of-sale terminals.
The sector is also standardizing transaction processes through International Bank Account Numbers (IBANs) and the Somali Quick Response Code (SOMQR). The CBS is simultaneously preparing a currency reform program to reintroduce the Somali Shilling by 2026, aiming to reduce the economy’s heavy reliance on the US dollar and curb counterfeit currency circulation.
Ongoing Challenges
Despite these steps, the sector faces structural challenges. Five banks still hold nearly 90% of assets and deposits, while formal banking services cover only 10% to 15% of the adult population, mostly in urban centers like Mogadishu. A lack of national deposit insurance continues to limit public trust, leaving many Somalis reliant on mobile money or cash for savings.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.