The Central Bank of the Republic of Somaliland has officially launched the implementation of the Banking and Financial Institutions Collateral Law (Law No. 110/2025), a comprehensive new legislation focused on collateral and enforcement mechanisms in the financial sector.
The milestone was marked by a high-profile ceremony attended by senior officials from the Central Bank, including Governor Abdinasir Ahmed Hirsi and Deputy Governor Hamse Abdirahman Khaire, as well as the Minister of Finance, the Minister of Commerce and Tourism Abdurahman Hassan Nur, the Chairman of the Chamber of Commerce, representatives from private banks, the House of Representatives, and judicial institutions.
The law, recently approved by both the House of Elders (Guurti) and the House of Representatives, was signed into effect by the President of Somaliland, making it operational nationwide.
In his keynote address, Central Bank Governor Abdinasir Ahmed Hirsi described the legislation as a fully comprehensive framework that balances and protects the rights of both lenders (creditors) and borrowers (debtors). “This law is a complete piece of legislation that safeguards the rights of both the lender and the borrower,” he stated. He further emphasized that the Act strongly encourages commercial investment and financing within the country by establishing clear, fair rules for collateral use and enforcement.
Deputy Governor Hamse Abdirahman Khaire, attending the official launch of the event, highlighted that its development involved extensive collaboration over a long period with all key stakeholders—including private banks, parliamentary bodies, and the judiciary. “This partnership has been essential for advancing the country’s financial system and building a reliable, efficient framework that inspires confidence,” he said.
Minister of Commerce and Tourism Abdurahman Hassan Nur underscored the law’s potential to attract international investors. “When investors see that we have such ready and modern laws in place, they will be more encouraged to invest in the country,” he noted. He added that the legislation will particularly boost access to financing for small and medium-sized enterprises (SMEs), fostering broader economic growth.
The Chairman of Somaliland’s private banks hailed the achievement as a major national success, pointing out that the law was developed and finalized entirely by Somaliland’s Central Bank and domestic institutions, without external expert input—a contrast to many other countries that rely on foreign assistance for such reforms. “It is a great victory that we own this law from its inception to its implementation, without support from anyone else,” he declared.
The new Act is widely viewed as a critical step in modernizing Somaliland’s financial sector, enhancing legal certainty in lending practices, strengthening trust in the banking system, and supporting sustainable economic development in line with the country’s Islamic finance principles.
The Central Bank has indicated that the law, along with its associated enforcement system, will play a key role in promoting financial inclusion and stability moving forward.
