The Money Exchange Dealers of Kabul: A Study of the Hawala System in Afghanistan (World Bank Working Papers)

Printed on Demand. Contact books@worldbank.org, if currently unavailable. The Money Exchange Dealers of Kabul is an exploratory piece of research on how the informal financial sector operates in conflict-afflicted countries. This paper presents the findings, analyses and conclusions of a study on the operational characteristics of an informal funds transfer system found in Afghanistan, generally referred to as hawala. It describes the system¿s geographic characteristics, convenience, effectiveness, cost, and its relationship with the formal financial system. It studies the domestic transfer of development funds by international aid institutions and nongovernmental organizations and discusses the hawala system¿s benefits as well as the operational characteristics that make it vulnerable to abuse. Finally, it presents the authors conclusions on the developmental role of informal financial institutions in the Afghan financial system; the implications for financial management practices of donor-financed development programs; and the regulatory and supervisory options for Da Afghanistan Bank.Samuel Munzele Maimbo is the author of 'The Money Exchange Dealers of Kabul: A Study of the Hawala System in Afghanistan (World Bank Working Papers)', published 2003 under ISBN 9780821355862 and ISBN 0821355864.