UCLA

This thesis explores the roles hawalas have played in Somalia since the early 1990s and provides a theoretical framework for understanding the contractual forms and underlying mechanisms of the hawala. Instability and a lack of financial infrastructure in Somalia, coupled with the mass migration of millions of Somalis abroad, have fueled increasing demand for money transfers. Hawala companies emerged to meet this growing need, which led to the formalization and transformation of hawalas themselves. In addition, hawalas are a financial mechanism used not only for business transactions, but also to remit and safely transport money over long distances. This, combined with the hawala’s potential for economic development in Somalia, makes them particularly useful in the modern Somali context.