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Hawala Banking: Understanding the Informal Financial System
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Hawala Banking: Understanding the Informal Financial System

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Questions and Answers

What is a potential consequence of conducting hawala transactions?

  • Risk of financial loss due to fraudulent practices or errors (correct)
  • Guaranteed financial gain
  • Increased transparency in transaction records
  • Established dispute resolution mechanism
  • What is a motivation for hawalanders to maintain their network and serve customers well?

  • To increase their personal gain
  • To avoid legal consequences
  • To comply with government regulations
  • To attract more customers and maintain their reputation (correct)
  • What is a potential misuse of unregulated hawala systems?

  • Money transfer for legitimate business purposes
  • Investment in stock markets and real estate
  • Money laundering, terrorist financing, and other illegal practices (correct)
  • Charitable donations and humanitarian aid
  • What can affect the value of money transferred via hawala?

    <p>Fluctuations in exchange rates or other market conditions</p> Signup and view all the answers

    What was the estimated amount of cash accepted by Dutch potato and onion traders between 2014 and 2019?

    <p>150 million euros</p> Signup and view all the answers

    Why did the surveyed agricultural product traders in the Netherlands report accepting cash payments?

    <p>Because there is no functioning banking system with Mauritania, for example</p> Signup and view all the answers

    What is the term for a payment through a person or entity not normally related to the deal?

    <p>Third-party payment</p> Signup and view all the answers

    What is the primary motivation behind the use of hawala banking?

    <p>Cultural motives, speed, trust, and hiding from supervision of governments</p> Signup and view all the answers

    What is the main characteristic of hawala banking?

    <p>Informal system of transactions based on trust</p> Signup and view all the answers

    What is the purpose of the example case discussed in the course?

    <p>To provide a practical explanation of how hawala banking works</p> Signup and view all the answers

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