Hawala System

The Hawala system is an informal method of transferring money across distances without using traditional banks. It relies on a network of trusted brokers called hawaladars, who verify transactions based on trust and reputation. When someone wants to send money, they give funds to a local hawaladar, who then instructs a partner in the recipient's location to release the equivalent amount, often without physical movement of cash. This system is often used in regions where banking infrastructure is limited or for faster, discreet transfers. It operates outside formal financial institutions but is guided by strong mutual trust among participants.