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The Money Exchange Dealers of Kabul : A Study of the Hawala System in Afghanistan

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  • Samuel Munzele Maimbo

Abstract

Money convenient, and inexpensive means of transferring funds into Afghanistan and among its provinces. They offer a diverse range of financial and non-financial business services at the local, regional, and international level. More recently, they have been instrumental in providing financial services for the delivery of emergency relief and humanitarian and developmental aid into Afghanistan for the majority of international and domestic NGOs, donor organizations, and development aid agencies. This study was undertaken to: (1) determine the current practice of hawala in Afghanistan; (2) verify the assertions regarding the convenience, speed, and cost-effectiveness of hawala transactions in comparison with formal financial institutions such as the central bank and the remaining state banks; (3) evaluate the use of money exchange dealers to remit development funds to regions that are not served by formal financial institutions; (4) identify the operational characteristics that make the hawala system vulnerable to financial abuse; and (5) consider the appropriate regulatory and supervisory options for informal funds transfer systems in Afghanistan.

Suggested Citation

  • Samuel Munzele Maimbo, 2003. "The Money Exchange Dealers of Kabul : A Study of the Hawala System in Afghanistan," World Bank Publications - Books, The World Bank Group, number 15087.
    • Handle: RePEc:wbk:wbpubs:15087
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    File URL: https://openknowledge.worldbank.org/bitstream/handle/10986/15087/269720PAPER0Money0exchange0dealers.pdf?sequence=1
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 1-48.
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    Cited by:

    1. World Bank, 2008. "Housing Finance in Afghanistan : Challenges and Opportunities," World Bank Publications - Reports 8070, The World Bank Group.
    2. Richard P. C. Brown & Fabrizio Carmignani & Ghada Fayad, 2013. "Migrants’ Remittances and Financial Development: Macro- and Micro-Level Evidence of a Perverse Relationship," The World Economy, Wiley Blackwell, vol. 36(5), pages 636-660, May.
    3. Daniel Garrote-Sanchez, 2017. "International Labor Mobility of Nationals," World Bank Publications - Reports 30268, The World Bank Group.
    4. Brigit Helms, 2006. "Access for All : Building Inclusive Financial Systems," World Bank Publications - Books, The World Bank Group, number 6973.
    5. Barlas, Ahmad Walid, 2022. "Population Movements in Afghanistan: A Historical Overview, Migration Trends under the Taliban Regime, and Future Outlooks," MPRA Paper 114179, University Library of Munich, Germany.
    6. Martin, Marina B.V., 2009. "Hundi/hawala: the problem of definition," LSE Research Online Documents on Economics 47415, London School of Economics and Political Science, LSE Library.
    7. Blumenstock, Joshua & Callen, Mike & Ghani, Tarek & González, Roberto, 2024. "Violence and financial decisions: evidence from mobile money in Afghanistan," LSE Research Online Documents on Economics 117303, London School of Economics and Political Science, LSE Library.
    8. World Bank, 2004. "Trade and Regional Cooperation between Afghanistan and its Neighbors," World Bank Publications - Reports 15547, The World Bank Group.
    9. Dulce Redín & Reyes Calderón & Ignacio Ferrero, 2014. "Exploring the Ethical Dimension of Hawala," Journal of Business Ethics, Springer, vol. 124(2), pages 327-337, October.
    10. Dulce Redin & Reyes Calderón & Ignacio Ferrero, 2012. "Cultural Financial Traditions and Universal Ethics: the Case of Hawala," Faculty Working Papers 08/12, School of Economics and Business Administration, University of Navarra.

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