The Challenges of Transferring Money in Syria

by Daniel Aron

Why are money transfers so vital to Syria?

In times of crisis, remittances exist as an invaluable source of income, and can act as a lifeline, enabling the acquisition of food, water and other essentials required to survive. Syria has been embroiled in a deteriorating humanitarian crisis since civil war broke out in 2011, including distressing reports of “genocide” in Aleppo[1]. However, the situation appears to finally be improving, with the United Nations Special Envoy for Syria, last week envisaging 2017 as a year of diplomacy and rebuilding in Syria following five years of ‘ruthless war’[2]. Recent figures estimate that 11 million Syrians have fled their homes since the conflict began, with 13.5 million in need of humanitarian assistance within the country[3]. A recent KNOMAD report, analysing “Remittances Sent to and from Refugees and Internally Displaced Persons” concluded that remittances are severely affected as a result of forced displacement[4]. However, it is this forced displacement, along with soaring food prices and shortages which means there is significant need for those stranded in Syria to receive money from friends and family overseas. For Syrian refugees located in neighbouring Arab states or Europe, sending remittances back to loved ones in their home country carries unprecedented importance.

What are the current problems surrounding “money transfer” in Syria?

  • Channelling money into Syria has proven extremely difficult, given the multitude of financial restrictions and sanctions on the Middle Eastern country.
  • Unsurprisingly, the current environment is both challenging and expensive.
  • The banking sector is barely operational following the mass closure of banks in Syria.

The barely operational banking sector, compounded by the sanctions environment and extortionate exchange rate fees charged by Money Transfer Organisations (MTOs), has led to Informal Value Transfer Systems (IVTS) being used as the principal way to exchange money. In particular, transferring money into and out of Aleppo has proven extremely difficult, due to the absence of wire transfers and crossing the border with cash being considered too risky. As this Syrian woman describes, “after the siege of Aleppo it became very difficult to get any money, especially from regime-held areas, I’ve had to borrow money from friends just to survive but food prices in Aleppo are so high that everyone is really struggling.”[5]

In this environment, using a Hawala agent is the cheapest and most accessible way for Syrians to receive remittances. A 2015 report published by the Norwegian Refugee Council[6] examined these informal mechanisms and found Hawala agents are playing a leading role in money transfers, outside of government control and regulations’.

Not surprisingly, the greatest risk when sending funds into Syria is that there is little guarantee that these funds will reach their intended recipients. The high risk “Hawala” agents often money launder on behalf of terrorist groups. This makes banks and MTOs particularly sceptical about money transfers in Syria as they need to mitigate the risks of heavy fines from regulators or potential reputational damage to their organisations. Moreover, there is a total lack of financial access in the most damaged areas.  The Norwegian Refugee Council report pinpoints distance to money transfer operators as the biggest hindrance to Syrians receiving remittances, especially in Southern Syria. Thus, civilians are paying smugglers to make the 100km trip to the Syria/Turkey border and back, to receive Syrian pounds.

The reality is that the routing of regulated and unregulated remittances remains difficult to track, due to the paucity of documentation available and general sensitivities regarding sharing information on activities in Syria at present. The graph on the right indicates that official World Bank statistics on remittances into Syria have stagnated since 2011. 

Where are Syrian Migrants located and which countries are remitting to Syria?

  • As highlighted by World Bank Statistics (see graph to the right), neighbouring Arab States including Saudi Arabia, Lebanon, Jordan and Turkey account for 76% of total remittances to Syria.
  • This correlates with the 2015 IOM Global Migration Trends Factsheet which reveals that there are 2.2 million Syrian migrants in Turkey, a further 1.2 million in Lebanon, and 630,000 in Jordan.

The clear majority of Syrian refugees are in neighbouring Arab States and are struggling to remit to family and friends in their home country. As well as recent refugees, the Syrian diaspora around the globe are also continuing to try and assist their relatives and friends stranded in Syria. MTOs such as Western Union have identified the high demand from an increasing number of Syrian refugees wanting to send remittances home[7]. Unfortunately, in this space, there is no #fintech or digital finance involved, with online money transfer services not provided by MTOs to Syria.

What we need to see – A Humanitarian Response from the Major Players

With the number of Syrian migrants worldwide growing at an alarming rate, key players within the money transfer industry need to formulate a strategy that will reopen and facilitate money transfer to vulnerable and displaced civilians in Syria.
We need to simplify the process for Syrians to receive remittances.
We need a serious response analysing how to stop money being easily funnelled to ISIS and other terrorist groups.
It is a highly complex issue that merits far greater attention from international authorities than currently being seen. The UK government’s efforts to open safe corridors in Somalia with the UK–Somalia Safer Corridor Initiative in October 2015, is a great example, highlighting the potential to improve remittances in a highly fragile state. [8] Of course, Syria provides a far greater challenge in its current climate, but the Somalian example sets an excellent precedent.









[8] UK–Somalia Safer Corridor Initiative October 2015


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