Somaliland declared independence from Somalia in 1991. Thirty-five years later it has its own currency, its own central bank and no seat at the United Nations. For a bank, that last fact is not an abstraction: it decides whether you can open an account with a correspondent bank abroad, and therefore whether your customers can send a dollar out of the country.

Wadaag Bank, the territory’s sixth licensed commercial bank, was inaugurated at the Sarovar Premiere Hotel in Hargeisa, Somaliland, on 31 August 2025, at a ceremony the bank says was attended by the President of the Republic of Somaliland and senior government officials. Almost a year later it is only now opening for commercial business: its own website still carried a “coming soon” notice on 2 August 2026.

The bank is licensed by the Central Bank of Somaliland and describes itself as digital-first and fully Sharia-compliant. Its ownership structure is the unusual part. Shares are sold to the public at $1,100 each across three tiers, from founding shareholders holding 500 shares or more down to general shareholders with fewer than 100.

Mobile money is the part of Somaliland’s financial system that already works. Telesom’s Zaad and Dahabshiil’s eDahab are used almost universally, and Wadaag says its platform interoperates with both. Elsewhere on the continent that kind of interoperability has taken years of regulatory pressure, as with Kenya’s operator integration, or purpose-built open-source rails such as Mojaloop.

Abdirahman Muse, chief executive of Wadaag Bank, answered tech.africa’s written questions on what digital-first means in a territory where formal banking is concentrated in four cities, how Sharia structures hold up inside an app, and what it costs to build a bank that the global financial system does not formally recognise.

This Q&A has been lightly edited for brand conventions, house style and length. The structure of Muse’s answers is preserved.

Abdirahman Muse, chief executive of Wadaag Bank. Image: Wadaag Bank

What gap in Somaliland’s financial system did Wadaag set out to fill?

When we launched Wadaag Bank, our vision was not simply to establish another bank. We wanted to transform financial inclusion in Somaliland. Although the banking sector has grown in recent years, it remains relatively small, with Wadaag becoming only the sixth licensed commercial bank.

We identified several major gaps. Existing banking services are concentrated in urban areas, many productive sectors remain underserved, and access to affordable Sharia-compliant finance is still limited. Digital banking capabilities are also underdeveloped, particularly for rural communities.

Gap the bank identified	What Wadaag says it offers
Limited range of Islamic financial products	Mudarabah, Musharakah, Sukuk and Ijarah structures
Banking concentrated in major cities	Nationwide agency banking and digital channels
Limited digital banking integration	A digital platform interoperable with the Zaad and eDahab mobile wallets
Expensive financing	Risk-sharing Islamic financing models
Few investment options for the diaspora	Diaspora investment and savings products
Limited support for Somaliland Shilling transactions	Full Somaliland Shilling integration across the platform
Limited housing and green finance	Islamic home finance and sustainable financing
No sector-specific financing	Dedicated agriculture, livestock, fisheries, mining and SME finance

Source: Wadaag Bank

Our priority customers include individuals and families, SMEs, women entrepreneurs, young entrepreneurs, farmers, livestock producers, the Somali diaspora, and businesses that have traditionally been underserved by the formal banking sector.

What does “digital-first” mean in practice in Somaliland?

For us, digital-first means bringing the bank to the customer instead of requiring the customer to travel to the bank. Traditional banking services are largely concentrated in cities such as Hargeisa, Berbera, Burao and Borama, leaving many communities without convenient access to formal financial services.

Through our Wadaag Pay wallet and our website, customers can:

Open accounts remotely without visiting a branch
Complete digital onboarding with remote biometric identity verification
Receive transaction alerts by SMS and WhatsApp
Transfer money instantly
Apply online for Islamic financing
Receive financing digitally and repay electronically
Reach services by smartphone, or by USSD where there is no internet access
Transact with both the Zaad and eDahab mobile money platforms

This digital ecosystem allows us to reach customers anywhere in Somaliland while significantly reducing the cost of banking.

How do Sharia principles and digital banking combine?

Digital banking and Islamic finance are fully compatible. Technology is simply a delivery channel. Sharia compliance depends on the structure of the transaction rather than the method through which it is conducted.

One of the established principles of Islamic jurisprudence holds that commercial transactions are permissible unless they contain a prohibited element such as riba (interest), gharar (excessive uncertainty) or maysir (gambling).

Every investment and financing application submitted through our digital channels undergoes the same review as an in-person application. Each transaction is reviewed by our investment team, our compliance function and our Sharia Supervisory Board before approval. Customers can access Mudarabah investment accounts, Murabaha asset finance, home financing, SME financing, agricultural finance and trade finance digitally. Technology improves speed and convenience while preserving full Sharia compliance.

How is the bank reaching women, young entrepreneurs and small businesses?

Financial inclusion is one of Wadaag Bank’s founding objectives. We are using technology, agency banking and community partnerships to reach people who have traditionally been excluded. Our strategy is built around four pillars.

On financial inclusion, we are formalising traditional Hagbad savings groups, a rotating savings and credit association, expanding access to rural communities, providing Islamic microfinance and targeting more than 100,000 previously unbanked customers within five years.

On economic empowerment, we finance SMEs, support women-owned businesses, finance agriculture and livestock, and provide Qard Hasan, an interest-free loan, alongside partnership-based financing.

On financial literacy, we run community education campaigns, partner with universities and vocational institutions, and deliver youth-focused education through digital platforms.

On community development, we finance infrastructure through Sukuk, support renewable energy projects and are creating a Community Investment Fund linked to Zakat principles.

The biggest challenges remain financial literacy, digital literacy and reaching remote populations. However, technology is helping us overcome these barriers faster than ever before.

Why focus lending on livestock, agriculture and fisheries?

Productive sectors are the backbone of Somaliland’s economy. Agriculture and livestock alone account for over 60% of employment, yet they receive only a small share of formal financing.

Rather than focusing primarily on consumer lending, Wadaag Bank priori...

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