Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
Hundi: An Informal Remittance Transfer System in Asia

Hundi: An Informal Remittance Transfer System in Asia

Ratings: (0)|Views: 37|Likes:
Published by Ahyan_Zelman
The informal funds transfer system found among South Asian migrant workers in general and Bangladeshi migrant workers in particular in the major labour-receiving countries of East and South-east Asia is popularly known as hundi. The hundi is informal but highly organized and founded on social infrastructure comprised of social and symbolic ties. Existing literature tends to highlight formal remittance channels and is underwritten by either economic or security concerns. Focusing on the social dimensions of the hundi as an informal funds transfer system and the recent security implications of the hundi system, this study examines the operations of and social relationships embedded within the hundi system in the context of East and South-east Asia. Drawing on the experiences of a Bangladeshi sending village as well as four destination countries in East and South-east Asia, this study reports that there are three phases in hundi transactions: the first mile, the intermediary stage and the last mile. The hundi is adopted and transformed through reciprocity. The system is composed of a web of interconnecting social relationships that supports the transfer of migrants’ savings internationally. We find reliability and credibility as essential ingredients to a hundi business and these are maintained through social sanctions. The study suggests that migrant workers’ right to use a cheap and convenient service should be facilitated.
The informal funds transfer system found among South Asian migrant workers in general and Bangladeshi migrant workers in particular in the major labour-receiving countries of East and South-east Asia is popularly known as hundi. The hundi is informal but highly organized and founded on social infrastructure comprised of social and symbolic ties. Existing literature tends to highlight formal remittance channels and is underwritten by either economic or security concerns. Focusing on the social dimensions of the hundi as an informal funds transfer system and the recent security implications of the hundi system, this study examines the operations of and social relationships embedded within the hundi system in the context of East and South-east Asia. Drawing on the experiences of a Bangladeshi sending village as well as four destination countries in East and South-east Asia, this study reports that there are three phases in hundi transactions: the first mile, the intermediary stage and the last mile. The hundi is adopted and transformed through reciprocity. The system is composed of a web of interconnecting social relationships that supports the transfer of migrants’ savings internationally. We find reliability and credibility as essential ingredients to a hundi business and these are maintained through social sanctions. The study suggests that migrant workers’ right to use a cheap and convenient service should be facilitated.

More info:

Categories:Types, Research
Published by: Ahyan_Zelman on Apr 10, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

09/29/2014

pdf

text

original

 
This article was downloaded by:[Rahman, Md Mizanur]On:4 April 2008 Access Details:[subscription number 791933265]Publisher:RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK
 Asian Population Studies
Publication details, including instructions for authors and subscription information:http://www.informaworld.com/smpp/title~content=t714592815
THE SOCIAL ORGANIZATION OF
HUNDI
Md Mizanur Rahman; Brenda S. A. YeohOnline Publication Date:01 March 2008To cite this Article:Rahman, Md Mizanur and Yeoh, Brenda S. A. (2008) 'THESOCIAL ORGANIZATION OF
HUNDI
', Asian Population Studies, 4:1, 5 - 29To link to this article: DOI:10.1080/17441730801963490URL:http://dx.doi.org/10.1080/17441730801963490PLEASE SCROLL DOWN FOR ARTICLEFull terms and conditions of use:http://www.informaworld.com/terms-and-conditions-of-access.pdf Thisarticlemaybeusedforresearch,teachingandprivatestudypurposes.Anysubstantialorsystematicreproduction,re-distribution,re-selling,loanorsub-licensing,systematicsupplyordistributioninanyformtoanyoneisexpresslyforbidden.Thepublisherdoesnotgiveanywarrantyexpressorimpliedormakeanyrepresentationthatthecontentswillbecompleteoraccurateoruptodate.Theaccuracyofanyinstructions,formulaeanddrugdosesshouldbeindependentlyverifiedwithprimarysources.Thepublishershallnotbeliableforanyloss,actions,claims,proceedings,demandorcostsordamageswhatsoeverorhowsoevercausedarisingdirectlyorindirectlyinconnectionwithor arising out of the use of this material.
 
   D  o  w  n   l  o  a   d  e   d   B  y  :   [   R  a   h  m  a  n ,   M   d   M   i  z  a  n  u  r   ]   A   t  :   0   5  :   5   3   4   A  p  r   i   l   2   0   0   8
THE SOCIAL ORGANIZATION OF
HUNDI 
Channelling migrant remittances from Eastand South-east Asia to Bangladesh
Md Mizanur Rahman
and
Brenda S. A. Yeoh
The informal funds transfer system found among South Asian migrant workers in general and Bangladeshi migrant workers in particular in the major labour-receiving countries of East and South-east Asia is popularly known as
hundi
. The
hundi
is informal but highly organized and founded on social infrastructure comprised of social and symbolic ties. Existing literature tends tohighlight formal remittance channels and is underwritten by either economic or security concerns.Focusing on the social dimensions of the
hundi
as an informal funds transfer system and therecent security implications of the
hundi
system, this study examines the operations of and social relationships embedded within the
hundi
system in the context of East and South-east Asia.Drawing on the experiences of a Bangladeshi sending village as well as four destination countriesin East and South-east Asia, this study reports that there are three phases in
hundi
transactions:the first mile, the intermediary stage and the last mile. The
hundi
is adopted and transformed through reciprocity. The system is composed of a web of interconnecting social relationships that supports the transfer of migrants’ savings internationally. We find reliability and credibility asessential ingredients to a
hundi
business and these are maintained through social sanctions. Thestudy suggests that migrant workers’ right to use a cheap and convenient service should befacilitated.
KEYWORDS: hundi; remittances; informal channel; East and South-east Asia; Bangladesh;migrant workers; transnationalism; labour migration; foreign workers
Introduction
The transfers in cash (or kind) from migrants to their non-migrating families in thesource countries are usually referred to as ‘migrant remittances’.
1
Migrant remittances arecurrently second only to foreign direct investment and are significantly larger than officialdevelopment assistance in a number of developing countries (Ratha 2003). Between 2001and 2005 international migrant remittances’ flows increased by 58 per cent, to reach aboutUS$ 232 billion (World Bank 2006, p. 88). With about US$ 167 billion, developing countriesreceived the biggest share, while industrialised countries in North America and WesternEuropean countries are the major sources (World Bank 2006, p. xiii). The true value of remittances, however, is likely to be much higher because this official account does notcapture informal remittances (Abella 1989). One source estimates informal remittances asbetween US$ 100 and US$ 200 billion a year (Sander 2003, p. 4) while another puts thefigure between US$ 200 and US$ 300 billion a year (
Migrant Remittances
2004, p. 1). The
 Asian Population Studies, Vol. 4, No. 1, March 2008
ISSN 1744-1730 print/1744-1749 online/08/010005-25
2008 Taylor & Francis DOI: 10.1080/17441730801963490
 
   D  o  w  n   l  o  a   d  e   d   B  y  :   [   R  a   h  m  a  n ,   M   d   M   i  z  a  n  u  r   ]   A   t  :   0   5  :   5   3   4   A  p  r   i   l   2   0   0   8
flow of this huge amount of remittances demands a systematic inquiry into the channelsthrough which remittance is transferred across international borders.Broadly, we can identify two types of funds transfer channels: formal and informal.Within formal channels, the institutions involved in money transfers are supervised bygovernment agencies and laws that determine their creation, characteristics, operationsand closure (APEC 2003, p. 3). Formal systems include banks and postal services, moneytransfer operators (MTOs) and other wire transfer services, and credit unions. The formalsystem is often criticized for high transaction costs and exchange loss. For example, theWorld Bank estimates that the average cost of transferring remittances in a formal systemis about 13 per cent and sometimes exceeds 20 per cent of the amount remitted (Maimbo
et al 
. 2005, p. 5). However, an informal funds transfer channel
exists and operates outsideof (or parallel to) conventional regulated banking and financial channels
(Buencamino &Gorbunov 2002, p. 1). Informal funds transfer systems have long been in existence(Udovitch 1970; McPherson 1993). Initially used as part of trade and commerce, they werealso drawn upon by early migrants to transfer savings (Aggarwal 1966; Wu 1967; Hicks1993; Sandhu & Mani 1993).Presently, informal systems exist in different countries in different names and forms,for example,
hawala
(India, Pakistan and the Middle East),
hundi 
(Pakistan and Bangladesh),
fei-ch
’ 
ien
(China and South-east Asia),
chit 
(China),
chop
(China),
hui kuan
(Hong Kong),
 padala
and
paabot 
(the Philippines),
phei kwan
(Thailand),
chuyen tien tay ba
(Vietnam),
kyeyo
money (Uganda), and
mali a mbeleko
(Zambia) (see Passas 1999; Bezard 2002; APEC2003; Mellyn 2003; Maimbo & Passas 2004). The kind of informal funds transfer systemfound among South Asian migrant workers in general and Bangladeshi migrant workers inparticular in the major host countries of East and South-east Asia is popularly known as
hundi 
. The
hundi 
is informal but highly organized and founded on social infrastructurescomprising webs of relationships based on kinship, friendship, and regional networks. Inthe existing literature, the term
hundi 
is used in relation to the
hawala
system found inthe Middle East and South Asia (Passas 1999; Lambert 2002; Thieme 2003; Ballard 2005).However, the operations and characteristics of the
hundi 
as found in East and South-eastAsia are different in many respects from those of the
hawala
or other forms of informalfunds transfer methods found globally.Some variations of 
hundi 
operations among countries in East and South-east Asia arevisible and they are mostly attributed to macro-factors such as immigration policy,financial regulations, geographical proximity and clustering of migrant workers acrossnational territory of the concerned countries. We can broadly identify two key players inthe
hundi 
system:
hundiwala
and
hundi 
dealer.
Hundiwalas
are usually migrantentrepreneurs, who possess certain entrepreneurial qualities and specific social ties thatprovide the basis to seek access to the migrants and their families at home and abroad.They are physically involved in the collection of cash from migrant workers overseas, andin the carrying and distribution of cash to the migrants families back home. In contrast toquasi-similar types of individuals such as the
mulas
who tend to be only carriers of fundsand American goods to Cuba in the case of US-Cuba remittance systems (Orozco 2002a),the services that
hundiwalas
offer are much wider and go beyond the economictransaction of funds.
Hundi 
dealers are big funds operators, who are usually situated atthe node of regional financial activities such as Singapore and are involved in the transferof large funds.
6
MD MIZANUR RAHMAN AND BRENDA S. A. YEOH

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->