The Lebanese Are Switching To Money Transfer Companies Amid Banking Crisis

Lebanese Judge Orders Seizure Of Assets Of Former Head Of Money Changers Syndicate
Bloomberg/Patrick Mouzawak

Amid the banking crisis in Lebanon, people are forced to wait for hours to withdraw cash at the bank, forcing many to switch to money transfer companies as trust in lenders has gone.

Anyone who relies on traditional banks to receive their money will die 100 times before cashing it.

The banking sector is now widely despised and avoided after banks barred depositors from accessing their savings, shutting down hundreds of branches, and slashed thousands of jobs.

Last month, an armed man entered the Federal Bank of Lebanon in Hamra and held a number of employees and clients hostage to demand his $200,000 in frozen savings to pay hospital bills for his sick father.

Increasingly, as Lebanon’s deep crisis shows no sign of diminishing, money transfer agencies are filling the gap, also offering currency exchange and credit cards, and even setting up wedding gift registries.

People are now receiving money via Western Union’s Lebanese agent OMT, which operates more than 1,200 branches nationwide and handles 80% of money transfers outside the Lebanese banking sector.

“We create services similar to those that banks provide at the request of our customers,” said OMT spokesman Naji Abou Zeid.

About 250,000 residents of Lebanon received remittances in the first half of 2022, according to OMT, up to 8% from the same period last year.

The World Bank has reported that Lebanon received $6.6 billion in remittances in 2021, one of the highest levels in the Middle East and North Africa.

Lebanon has been battered by its worst-ever economic crisis since the financial sector went into meltdown in 2019. The local currency has lost more than 90% of its value on the black market, as poverty and unemployment have soared.

Related: The Lebanese Lira, Explained

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