Middle East

Remittance companies replace Lebanese banks

Beirut: Like many in crisis-hit Lebanon, Elias Skaff waited hours at his bank to withdraw cash, but now has lost confidence in his lenders and has decided to use a money transfer company. I like Anyone relying on conventional banks to receive money “will die 100 times before they cash it,” said Lebanon’s three-year economic slump with help from relatives abroad to pay US dollars. said Skaff, 50, who survived by borrowing

The banking sector, once the flagship of the Lebanese economy, was widely despised after banks barred depositors from accessing their savings, stopped providing loans, closed hundreds of branches and cut thousands of jobs. and avoided. Last month, a local man raided a bank in Beirut with a rifle, holding employees and customers hostage for hours, demanding part of his $200,000 frozen savings to pay his sick father’s hospital bills.

As Lebanon’s deep crisis shows no signs of abating, more and more remittance providers are filling the gap, offering currency exchange, credit card and tax payment services, and even registering wedding gifts. Skaff said Western now receives money through the Beirut branch of Union’s Lebanese agent OMT. Across the country, OMT operates more than 1,200 branches and handles 80% of Lebanon’s non-banking sector remittances, he said.

OMT spokesperson Naji Abou Zeid said: Lebanon is facing its worst economic crisis since the collapse of its financial sector in 2019. As poverty and unemployment soared, the local currency lost more than 90% of its value on the black market. Angry protesters often targeted banks and destroyed his ATM machines with stones and spray cans. His 45-year-old girlfriend Alaa Sheikhani, a customer waiting in line at an OMT branch, said she “can’t withdraw a cent” from the bank. “How should we trust them with our money?”

The recently married 36-year-old Ellie said she used Lebanese money transfer company Whish Money to create a registry of wedding gifts. He said this saved his wedding guests time, hassle and fees. “Instead of waiting for hours at banks, which are often crowded, you can hand over your money to an agent,” said the man, who spoke on condition of anonymity. “The time and money saved is unmatched.”

Dina Daher, Marketing Director of Whish Money, said the company wins customers by charging “zero fees” for transferring Lebanese pounds. Some companies pay salaries through money transfer companies instead of banks. “When the crisis started, we were forced to pay our salaries in cash. Bow Nader said.

But now her company, the sporting goods retailer Mike Sports, pays its employees through Whish, where employees “can easily withdraw their paychecks in installments for free,” Boo said. Mr Nader said. Sami Nader, director of the Levant Institute for Strategic Studies, said remittances from the Lebanese diaspora have become essential for families to survive the devastating economic crisis. “Today, a young Lebanese employee living abroad does not hesitate to transfer his $100 to his parents because this amount now makes a difference,” he said.

Lebanese banks have significantly increased fees for some services they still offer, including foreign currency transfers, which are now the only meaningful source of income. Nader added that this has further fueled the outflow to money transfer companies. About 250,000 Lebanese residents will receive remittances in the first half of 2022, an increase of 8% from the same period last year, according to OMT. The World Bank reports that Lebanon received $6.6 billion in remittances in 2021, one of the highest in the Middle East and North Africa. – AFP

https://www.kuwaittimes.com/money-transfer-firms-replace-lebanon-banks/ Remittance companies replace Lebanese banks

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