Fintech-Driven Trade Facilitation: Assessing the Revenue Models and Sales Determinants of E-Commerce Platforms in Somalia

Abstract

This doctoral dissertation provides a comprehensive empirical analysis of the microeconomic structures and macroeconomic contributions of fintech-driven trade facilitation systems within the Federal Republic of Somalia. Operating inside an institutional environment traditionally defined by weak central authority, the Somali private sector has engineered a sophisticated, completely digitalized monetary and commercial parallel system. This study investigates the operating revenue models and quantitative sales determinants of domestic electronic commerce (e-commerce) platforms that utilize this fintech infrastructure. Employing a mixedmethods research framework, quantitative data was gathered from a rigorous field survey of N = 412 digitized enterprises across major urban commercial hubs, including Mogadishu, Hargeisa, and Garowe. 

This dataset was paired with qualitative insights extracted from 24 semi-structured expert interviews with telecommunications executives, central banking authorities, logistics administrators, and cross-border trade coordinators. Econometric analysis using multi-variable Ordinary Least Squares (OLS) regression indicates that mobile financial platform integration behaves as a sovereign economic mechanism, with a 1% increase in mobile payment reliance leading to an approximate 1.84% gain in platform monthly gross sales. The comparative analysis of revenue designs demonstrates that the Merchant-Wholesaler (Direct Inventory Ownership) framework dramatically outperforms commission-based digital brokerages in sales volume and revenue consistency, as direct control over products mitigates the contract enforcement failures common in institutional voids.

 Furthermore, the findings show how digital mobilization—facilitated through informal clan networks, diaspora remittance pipelines, and distributed social-media channels—serves as an alternative mechanism to manage physical security risks, cross-border supply chain blockages, and fragmented interbank systems. The paper concludes by offering an integrated regulatory optimization roadmap designed for the Central Bank of Somalia and international development institutions. This blueprint outlines specific policies for standardized mobile money interoperability frameworks, the implementation of the National Digital ID system (Tirsi Aqoonsi), and structured public-private data networks to transition this resilient, informal digital economy into a formal, sustainable engine for long-term macroeconomic recovery.