Informal Funds Transfer Systems: An Analysis of the Informal Hawala System

Qorchi, Mohammed El; Maimbo, Samuel Munzele; Wilson, John F.

doi:10.5089/9781589062269.084

Cited by 148 publications

(116 citation statements)

References 8 publications

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“…In contrast to the opinion expressed by Qorchi, Maimbo and Wilson (2003), Li (2007) notes that informal financial system plays a complementary role to the formal financial system by servicing the lower end of the market and uses its monitoring and enforcement advantage to ensure repayment. He observes that informal financing in rural areas of China exists mainly in loan broking, providing lending (including usuries), underground banking, trade credit, pawning house, etc.…”

Section: Literature Reviewmentioning

confidence: 84%

“…Qorchi, Maimbo and Wilson (2003) also observe a renewed public interest in the activities of the informal financial sector following increasing press coverage focusing on the putative connection between terrorist financing activities and the informal funds transfer (IFT) system after September 11. They argue that informal financial system flourishes in countries with inefficient financial institutions and restrictive financial policies.…”

Section: Literature Reviewmentioning

confidence: 99%

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Lending Policies and Credit Administration in Pre-colonial Nigeria: A Case Study of Kundila of Kano

Dogarawa¹

2012

IJEF

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This Paper studies the canons of lending and credit administration methods in the pre-colonial informal financial sector taking a case study of Kundila a famous 19 th Century trader in Kano City. Using desk research and interview techniques, the study finds similarities in both the lending principles and credit management styles in the pre-colonial informal setting and the modern financial institution's practices. However, Islamic legal system in the 19 th Century has helped to quicken administration of justice on cases of loan default as against secular laws that tend to cause delay in modern Nigeria. There was also intensive monitoring of loan and cases of auction of collateral or other severe measures against loan defaulters. The paper concludes that modern financial sector can learn from the leasing methods of Kundila so as to accord small and medium scale enterprises the opportunity of acquiring sophisticated machineries and equipment. This will increase aggregate production and assist government in achieving food security as well as rapid economic growth and development in the economy.

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Section: Literature Reviewmentioning

confidence: 84%

Section: Literature Reviewmentioning

confidence: 99%

Lending Policies and Credit Administration in Pre-colonial Nigeria: A Case Study of Kundila of Kano

Dogarawa¹

2012

IJEF

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“…This system relies on trust between brokers and tracking of debts among brokers and does not necessitate physical movement of cash, written contracts, or promissory notes. The importance to brokers maintaining their standing and trust in their trading network provides assurance to those using the hawala system (Beachwood International 2015a;El-Qorchi et al 2003).…”

Section: Introductionmentioning

confidence: 99%

Are cash-based interventions a feasible approach for expanding humanitarian assistance in Syria?

Doocy

Tappis

Lyles

2016

Int J Humanitarian Action

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Background: The conflict in Syria is the largest driver of displacement worldwide with 4.1 million Syrian refugees, more than 6.5 million internally displaced people (IDPs), and 13.5 million people in need (PiN) of protection and humanitarian assistance inside Syria. Over the past decade, cash-based interventions (CBIs), including both conditional and unconditional cash transfers and voucher programs, have become increasingly common. While the cash-based response within Syria to date has been small compared to in-kind assistance, there is widespread interest in expanding the use of CBIs. This study explores the feasibility of cash-based modalities with the aim of informing future humanitarian assistance delivery strategies in northern Syria. Methods: The feasibility of CBIs is examined in terms of acceptability, infrastructure, humanitarian agency implementation capacity, value for money, risks, and responsiveness to changes in beneficiary needs. A mixed methods approach was used consisting of a literature review in addition to a household survey and key informant interviews (KIIs) conducted in early 2016 in four governorates of Syria (Aleppo, Hama, Idlib, and Al-Hasakeh). Results: Overall, 64.5% of surveyed households received assistance during the 4-month period from October 2015 through January 2016. In-kind assistance was most common, with 59.2% of households receiving in-kind food aid. More than half of households received only one or two distributions of assistance in any form. Unmet needs were ubiquitous, and food was the priority in 74.1% of households. Despite relatively limited coverage of cash and voucher assistance programs to date, stakeholders voiced a widespread preference for cash transfers as did household survey participants. When analyzed by sector, cash assistance was preferred by survey respondents for all sectors except WASH. The most significant challenge in implementing CBIs in Syria is the lack of a regulated cash transfer system for movement of funds into the country. The bulk of humanitarian money is currently transferred through informal value transfer networks (hawala), which appears to have the capacity to handle larger-scale cash transfer programming. Technical guidance and standardized procedures are needed to ensure due diligence is conducted to mitigate fiduciary risks and ensure accountability to both beneficiaries, donors, and other stakeholders. Conclusions: The possibility of more sustained, continuous assistance provided through cash transfer or voucher mechanisms negates many of the barriers faced in providing in-kind assistance. Consideration of the feasibility of cash as an alternative modality relies on local-level assessment of capacity, resources, political environment, beneficiary needs and preferences, and lessons learned from previous programs in those areas.

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“…A review of the existing research in the area of HNets reveals that most of the research has focused on defining what HNets do and describing the general mechanics of how money is transferred through the system (e.g., Ballard, 2003;El-Qorchi, Maimbo, & Wilson, 2003;Maimbo, 2003;Passas, 1999;2006;Schramm & Taube, 2002;Wilson, 2002). The current research on Hawala provides basic information on how the network operates and how the linkages among network members function (Ballard, 2005a); but leaves a number of important questions unanswered such as how these informal networks are governed, coordinated or how controls are established and exercised.…”

Section: Research Backgroundmentioning

confidence: 99%

Management, Control and Governance of Hawala Networks in the Gulf Cooperation Council Region

Sharif¹,

Mahama²,

Farooqi³

2017

AAMJAF

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Informal Funds Transfer Systems: An Analysis of the Informal Hawala System

Cited by 148 publications

References 8 publications

Lending Policies and Credit Administration in Pre-colonial Nigeria: A Case Study of Kundila of Kano

Lending Policies and Credit Administration in Pre-colonial Nigeria: A Case Study of Kundila of Kano

Are cash-based interventions a feasible approach for expanding humanitarian assistance in Syria?

Management, Control and Governance of Hawala Networks in the Gulf Cooperation Council Region

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