Earlier this year Mohamed Ali was reminded once again of the dangers of living and working in the Somali capital, Mogadishu.

Islamic militants attacked the presidential compound on 22 February, when his father was praying inside its mosque. Mr Ali's dad escaped injury, but nine others were killed.

"It was a very emotional moment," says the 33-year-old founder and boss of the Iftiin Foundation - an organisation that seeks to promote stability in Somalia through entrepreneurship.

That understated reaction is typical of Mohamed Ali, who was three when his parents fled the civil war and came to the US as refugees.

They settled in Columbus, Ohio, home to the country's largest Somali community, and Mr Ali was brought up in what he describes as a relatively privileged middle class home.


My family left Somalia because of the civil war, but these kids left because of a lack of employment, that's when I saw entrepreneurship as a tool for social impact”

But as he grew older he became aware of the problems many of his native countrymen and women were facing, with few resources at their disposal.

Nobody in the 50,000 strong US diaspora was a lawyer so Mr Ali decided to study immigration law at Ohio State University, and began working in the community.

But he also knew he wanted to use his skills to help Somalia itself rebuild, and so he spent several years visiting diaspora communities in Europe to find out what was needed. The idea for the Iftiin Foundation occurred during a trip to Rome.

"At the time there was no central government in Somalia, and nobody operating the embassy in Rome," he recalls.

"There were about 150 young men camped there, all illegal immigrants who had crossed the Mediterranean to get to Italy and were looking for jobs.

"My family left Somalia because of the civil war, but these kids left because of a lack of employment. That's when I saw entrepreneurship as a tool for social impact."

Too dangerous

The breakthrough came in 2010 when he received a call from the US State Department. His work in the community had been noted, and he was one of 80 young Muslim leaders invited to Washington to meet then Secretary of State Hillary Clinton as part of the government's Generation Change initiative.

"It was amazingly gratifying to be noticed," he says. "When I graduated a lot of my class went into the private sector and had high profile jobs, while I just went back to my community."


The Iftiin Foundation held a youth conference in Mogadishu last year


Inspired by the work of other young Muslim immigrants in countries such as Malaysia, Pakistan and Indonesia, Ali decided to launch the Iftiin Foundation in Somalia - even though the State Department considered the project too dangerous.

Undeterred, Mr Ali joined forces with his 27-year-old sister Sagal who was named a Champion of Change by President Obama in 2012 - and launched the foundation anyway.

"The basic idea is active capitalism - using capitalism as a tool for development rather than aid," he says. "We invest in these businesses and take an equity stake.

"Instead of just giving out grants we have a stake in their success - and their success means we are generating income that we can use to support our activity."

One of the biggest challenges is finding investors. Most Somali entrepreneurs are unable to finance debt, while Islamic law prohibits interest payments on loans.

In the absence of any government support, funding must come entirely from private sources. Some 80% of investment is in the form of remittances from Somali communities in the US or Europe.

"It's been a challenge and so far on a small scale - $5,000 to $15,000 [£3,000 to £9,000 per project]. But it doesn't take that much to start up a business in Somalia.

"We have been successful at this scale, and our hope in the next year or two is to make larger investments and engage bigger donors."

'Heartbroken'