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

_Occasional Papers, August 18, 2003_

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## Bibliographic details
- Authors: Mohammed El Qorchi, Samuel Munzele Maimbo, John F. Wilson
- Published: August 18, 2003
- Series: Occasional Papers
- DOI: https://doi.org/10.5089/9781589062269.084

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### Overview and scope
- Title: Informal Funds Transfer Systems: An Analysis of the Informal Hawala System
- Authors: Mohammed El Qorchi, Samuel Munzele Maimbo, John F. Wilson
- Date of publication: August 18, 2003
- Series: Occasional Paper No. 2003/004
- Issue: 004
- Pages: 64
- Volume: 2003
- ISBN: 9781589062269
- ISSN: 0251-6365
- DOI: https://doi.org/10.5089/9781589062269.084

### Central findings and focus
- Since the terrorist attacks of September 11, 2001, there has been increased public interest in informal funds transfer (IFT) systems.
- The paper examines the informal hawala system, an IFT system found predominantly in the Middle East and South Asia.
- Analytical focus areas:
  - Historical and socioeconomic context within which the hawala has evolved.
  - Operational features that make hawala susceptible to potential financial abuse.
  - Fiscal and monetary implications for hawala-remitting and hawala-recipient countries.
  - Current regulatory and supervisory responses.

### Subject classifications and keywords
- Subject: Balance of payments, Banking, Commercial banks, Currencies, Economic sectors, Financial institutions, Financial sector, Foreign exchange, Money, Remittances
- Keywords: authority, Commercial banks, Currencies, Financial sector, Hawala transaction, IFT, IFT system, IFT transaction, Middle East, North America, OP, remittance system, Remittances, South America, South Asia, Southeast Asia, transaction, transfer system

### Operational features and vulnerabilities (as examined)
- Historical evolution and socioeconomic drivers shaping hawala operations.
- Features that increase susceptibility to financial abuse:
  - Informality of record-keeping and settlement mechanisms.
  - Cross-border settlement practices that may bypass formal banking channels.
  - Reliance on trust, reputation, and community networks rather than formal documentation.

### Macroeconomic and fiscal implications examined
- Implications for hawala-remitting countries:
  - Effects on official balance of payments reporting and foreign exchange flows.
  - Potential tax revenue and fiscal policy consequences where transactions occur outside formal channels.
- Implications for hawala-recipient countries:
  - Influence on monetary aggregates and informal liquidity circulation.
  - Challenges for monetary policy implementation when significant remittance flows bypass banking systems.

### Regulatory and supervisory responses covered
- Survey of current regulatory and supervisory measures addressing hawala-related risks.
- Consideration of approaches to reduce susceptibility to financial abuse while recognizing socioeconomic functions of hawala in affected regions.

### Access and publication notes
- Formats and distribution:
  - Listed as an IMF Occasional Paper with more formats available on the IMF eLibrary.
  - Citation format example provided in Chicago style.
- Related administrative metadata:
  - Stock No: S222EA

*Source: Informal Funds Transfer Systems: An Analysis of the Informal Hawala System, Mohammed El Qorchi, Samuel Munzele Maimbo, John F. Wilson, Occasional Paper No. 2003/004, August 18, 2003.*

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_Source: https://www.imf.org/en/publications/occasional-papers/issues/2016/12/30/informal-funds-transfer-systems-an-analysis-of-the-informal-hawala-system-16535_