Afghan Guide

Explainer9 Aqrab 14053 min read

How hawala works in Afghanistan: sending money through a saraf

Hawala is a way of moving money through a dealer (a *saraf* or *hawaladar*) without the money itself travelling. You pay a dealer in one place, and a dealer in another place pays your family. It rests on trust, it reaches villages, and it is the main money service for many Afghans. This piece explains how it works, what the rules say, and what to check. No source we could open gives hawala fees, so none are quoted here.

The back of a 1,000 afghani banknotePhoto: Sayfullah Al Maslul · CC0
The back of a 1,000 afghani banknotePhoto: Sayfullah Al Maslul · CC0
The back of a 1,000 afghani banknote

What a hawaladar does

A 2024 study for CGAP, based on field research in late 2023, calls hawaladars the main financial service provider for many Afghans. They offer money transfers inside Afghanistan and abroad, currency exchange, savings and informal lending. The business rests on personal relationships and community ties, and it reaches rural areas. The study describes the service as "inexpensive, efficient, and reliable".

Since August 2021, CGAP says, demand has grown because of the economic crisis, migration and weak trust in local banks. Competition between dealers has also grown, which presses on their profits.

How a transfer works

New America described the steps in 2022:

  1. You agree the transfer with a dealer. The deal is a verbal agreement, with no formal paperwork.
  2. The dealer gives you a transaction number and the address of a shop in the recipient's province.
  3. You pass the number and the address to your family, for example by WhatsApp or Telegram.
  4. Your family goes to that shop, gives the number and receives the cash.

New America calls the system fast and anonymous. The sources we opened do not describe how the two dealers settle their accounts between themselves.

Why trust matters

CGAP says trust runs from customers to the dealer, between dealers, and to the regulators. Many Afghans see their hawaladar as part of their community. That is why the usual advice is to use a dealer you or your family already know. Money sent to a stranger's shop has no paper behind it.

What the rules say

  • Licences. Da Afghanistan Bank (DAB), the central bank, announced in February 2021 that it was converting Sarafi businesses from individual to corporate licences.
  • 2017 rules. According to New America, they barred hawaladars from lending and holding deposits, and required them to record sender and recipient details.
  • Registration. New America reports that on 27 December 2021 the current authorities gave hawaladars 40 days to register, and that in April 2022 DAB told people to avoid unlicensed exchangers. The same article says these rules have not been enforced in full.
  • 2024. Pajhwok reported in June 2024 that DAB told small money changers to stop hawala deals and to get an activity card, within five days, from a licensed money changer or money services company. In March 2024 DAB said it had never licensed anyone to offer online financial services.

Rules in this area change. Ask the dealer whether they are licensed, and check with DAB.

What to check before you send

  • Ask exactly how many afghanis (or dollars) your family will receive, not only the fee. Much of the cost can be in the exchange rate. The rate page shows the market rate for the day.
  • Keep the transaction number private until your family is at the shop.
  • Send only to people you know. Never send money to someone you have not met for a visa, a job or a "release fee".
  • Be careful of anyone who offers a transfer only through an online page or app that claims to be a money changer's.

The sending money tool compares hawala with the other ways: transfer companies, banks and mobile money.

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