Prior research has focused on the transactional aspects of the Hawala Networks (i.e. Invisible Funds Transfer Networks
Purpose This study aims to focus on how informal value transfer networks, Hawala business in particular, used social exchanges in their business dealings. More specifically, the conducted research looked into how social exchange theory was used in Hawala business relationship initiation and management. Design/methodology/approach Twenty-one depth interviews were conducted with Hawala Network members, and Hawala customers, in Qatar, Saudi Arabia and Pakistan. The collected qualitative data were analyzed through content analysis and NVivo 11 software. Findings The study outcome indicated that Social Exchange Theory was a principal relationship driver in Hawala Networks. Especially, trust had a pivotal role in evolvement and nurturing of Hawala Network business and social exchanges. Other relationship variables, namely, reciprocity, religious affiliation, reputation and information sharing had a significant part in relationship building as well. Results supported a prominent influence of time in carefully controlled and rigorously assessed transformation of Hawala relationships. This metamorphosis converted an exchange from short-term into a long-term orientation where limited amount transactions changed into large sum transactions and restricted information exchange moved to elaborate information sharing. In addition, findings revealed that monetary and non-monetary interactions between Hawala Network members took the form of a homogeneous club, with shared social, cultural, religious and ethnic values. In particular, financially constrained and illiterate social groups preferred Hawala services due to ease of servicing in the form of minimal bureaucracy, fast transfers and low service charges. These marginalized fractions of society had limited access to formal banking which made Hawala business their main (and in most cases only) source for sending and receiving financial remittances. Hawala Networks provided an effective alternative to formal banking for disadvantaged communities. Originality/value This study provided unique and useful insights into the nature of social exchanges within Hawala Networks. Especially, it provided clarification on how informal networked businesses used Social Exchange Theory to by-pass the need for legal protection and formal contracts. Furthermore, the study highlighted the role Hawala business played in providing essential banking services (e.g. transfer of money and micro-lending) to educationally and economically deprived individuals.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.