Comparison of Afghan Remittance Systems
Loading...
Date
2021-05
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
The Ohio State University
Abstract
In 2019 the Special Inspector General for Afghan Reconstruction noted that only 15% of Afghans have a bank account or use a mobile money provider. Nonetheless, Afghans continue to send and receive money from both domestic and international partners using services like Western Union (a U.S. based, international money transfer company), and the long-used, informal, Hawala system. This research examines and compares different payment/remittance systems available to Afghans. Specifically, this research uses factors derived from previous research to conduct a comparative analysis of several payment/remittance systems: Hawala, In Person Western Union Money Transfers, Traditional Banking Wire Transfers, and Bitcoin transfers. While several systems are used by Afghans, Hawala has historically enjoyed an advantage due to its community-developed trust. Even though Western Union transfers are reliable, faster, and trackable, formal identification requirements and corruption in Afghan Banks has resulted in distrust in, and limited use of, such established institutions. The research found trust to be the main factor that separates Hawala from alternatives and the comparisons lead to a recommendation that trust building through community relations is a central part of a successful framework for a legal, trusted, and reliable payment system.
Description
Keywords
Remittance, Afghanistan, Hawala, Payment Systems