Lebanon’s failing banking sector forces many to turn to money changers to survive
In a crisis-ridden Lebanon, money transfer companies offer an alternative to the dysfunctional banking system, providing services ranging from Visa credit cards, salary payments, and even wedding gift registries.
Until not so long ago, queuing outside a bank, waiting to withdraw money from the local ATM, was considered commonplace in Beirut.
But this is no longer the case. Once the flagship of the Lebanese economy, the banking sector is now widely mistrusted and shunned.
To cope with the collapse of the country’s financial system, banks closed hundreds of thousands of branches and suspended many services, including loans.
“Now you can’t even pull one out [Lebanese] book. How are you supposed to have enough confidence to invest more money in [banks] if they take it? asked Beirut resident Alaa Cheikhani.
With the economic crisis showing no signs of recovery, money transfer companies are filling the void, offering services usually provided by banks – currency exchange, credit cards or tax payments – and even setting up registers of wedding gifts.
And a growing number of people are using such agencies to pocket the remittances they need to survive.
“If you make a bank transfer, you’ll die a hundred deaths before you get it. Even if you have an account, you need an appointment to go to the bank,” explained Elias Skaff, another resident of Beirut.
But with money transfer agencies, “you walk in, take a number and exchange. I don’t have any money, but if I get money from my brothers and sisters abroad… that’s how we live,” Skaff said.
Lebanon’s unprecedented economic collapse is the result of years of mismanagement, corruption and abuse by the ruling elite. With the local currency losing more than 90% of its value due to stagflation, poverty and unemployment have soared, making the republic one of the largest remittance-receiving countries in the world.
According to the World Bank, the amount of money sent from abroad in 2021 reaches $6.6 billion, a sum that represents more than half of Lebanon’s GDP.
But in a country plagued by conflict and corruption, money transfer agencies are now welcome resources for struggling Lebanese.