Search results

The purpose of this research paper is to consider the unique and even positive nature of hawalas and other informal fund transfer systems (IFTs) in the developing world.

Reviewing primary and secondary reports from national regulators, international organizations, and academics, the paper questions the conventional view that IFTs should be subject to extensive regulation and scrutiny because they have been abused by some participants. Many positive characteristics of hawalas – speed, transaction cost, cultural convenience, and versatility – also contribute to their abuse. The paper examines the modern uses of hawalas, including legitimate – remittances from migrant workers, humanitarian and emergency aid, personal investments – and illegitimate – money laundering, terrorist financing, tax and customs evasion, circumventing exchange controls – applications. The paper then discusses legal issues involving IFTs in developing and developed countries, discussing factors the international community should consider when designing regulatory systems. The paper reviews developing world IFT regulation in the UAE, Afghanistan, Somalia, the Eastern and South African Anti‐Money Laundering Group, and Columbia, and developed world regulation in The Netherlands, the UK, and the USA.

The paper concludes that IFTs are robust in jurisdictions where formal banking systems are absent or weak, or where structural obstacles distort foreign exchange and other financial markets.

Looking forward, the paper considers, inter alia, licensing or registration requirements and the rationale for choosing one over the other, and the need for competent authority due diligence on IFT operators.

This paper aims to provide new insights into the financing system used in emerging economies and how they related to UN Development Goals for sustainable development. The study focuses on small businesses’ informal financing options and whether these lead the borrower into a debt trap.

The study uses the example of small-medium fisheries in Indonesia to highlight the formal/informal financing options availed by the businesses and their relationship with the lender. The authors use the qualitative method with a phenomenology approach and interview key stakeholders in the sector.

The authors find that the set interest repayments and the checks and balances involved in judging the borrower’s creditworthiness make the formal due to the strict requirements. Instead, the fishermen rely on the informal financing system and borrow from the mapak – a person who lends money on the condition that the fishermen’s catch will be sold to the lender as repayment.

This study focuses on the financing system in emerging economies. Using the coastal business areas in the Indonesian fishing sector, the authors highlight the informal financing system and the potential debt trap. Future research could extend and study this issue in other industries and geographic regions to test whether emerging economies meet their targets and commitments under the UN Sustainability Development Goals. Emerging markets like Indonesia have a unique model of financing system and their business structure. Three conditions are highlighted in the financing system of business in coastal areas, namely, informal financing, close market access and social capital.

This study addresses financial inclusion and whether the UN Sustainability Development Goal 8 is being met in emerging economies. The study is one of the few to address this issue and highlights that emerging economies are yet to take concrete steps to make the formal financing sector more inclusive to achieve poverty alleviation.

In 1974, the UN General Assembly adopted a landmark resolution proclaiming the establishment of a New International Economic Order. One of the basic aims of this declaration was to enhance the voice and participation of developing countries in the international economic decision-making process based on norms of equitable governance. More than four decades have passed since its adoption. This paper aims to reflect on the past 43 years of the global financial regulatory system in light of the notion of equitable governance as envisioned by the “New International Economic Order”.

This paper surveys the global financial regulatory system from the vantage point of equitable economic governance. This discussion covers the period that comes after the 1974 UN landmark resolutions that declare the establishment of a “New International Economic Order”. The authors use qualitative and quantitative approach in this study. They use descriptive statistics and intuitive discussions of certain cases to carry the objective of the paper forward.

First, part of the development in global financial regulation manifests the establishment of informal networks that embark on global regulatory issues, while being very exclusive in their membership policies. Second, the lack of full and effective participation of developing countries in the decision-making and norm setting remains unsolved in the global financial regulatory system. Third, the shadow role of the World Bank and International Monetary Fund was of great significance in assisting the implementation of non-binding regulatory rules of international finance in developing countries despite the concerns of legitimacy and equity in the making of international standards. In sum, the global financial regulatory system that emerged in the past four decades is quite different from that aspired by the NIEO.

The declaration of NIEO coincides with the collapse of the Bretton Wood’s fixed exchange rate which in turn leads to the emergence of a new financial system and regulatory development. This period marked the proliferation of informal networks that make policy recommendations or non-binding rules with global implications. As far as the literature review goes far, this paper is the first to survey the post Bretton Wood’s period of the global financial regulatory architecture based on the tenets of the “New International Economic Order”.

This study aims to investigate the role and spillover effects of the financial sector on the size of the informal economic activity in Turkey.

Time series analysis has been adopted for annual data of the 1970-2017 period. New approaches in unit root and cointegration tests have been used in this study. Estimations have been done via dynamic ordinary least squares and fully modified ordinary least square approaches.

Results confirm the existence of a long-run equilibrium relationship between the financial system and informal economic activities in Turkey. At the earlier stages of financial development (FD), informality tends to rise while in further stages, informality tends to decline over time. This study confirms the U-shaped relationship between FD and the informal economy in Turkey.

This study has used logarithmic values of series in the econometric analysis except for real interest rates because of negative values in some periods. Thus, by using level forms of real interest, missing values would be avoided.

Increasing efficiency, control and institutional quality, as well as the quality of governance environment, would be useful tools in reducing the size of informality, as this study finds that spillover effects of financial services on the informal economic activity are adverse.

This study is the first of its kind to the best of the knowledge in the case of Turkey, which estimates the spillover effects of FD on informal economic activity.

This paper aims to critically assess digital finance as a pro-poor intervention in the development finance space.

Using critical policy discourse analysis, this paper explains the turn from microfinance to digital finance, and thereafter discusses four issues: the lack of evidence that digital finance for poor people actually promotes socioeconomic development; the risks that poor people are exposed to, which arises from their exposure to digital finance technology; the lack of evidence that digital finance actually brings poor people immediate benefits; and the weak business rationale for digital finance.

The expectation for digital finance serving as a major pro-poor private sector intervention lacks justification.

The paper reflects on the effect of digital finance for poor people.

Using system theory, this paper aims to interrogate the impact of Boko-Haram on bank administration. The paper explains how death, injury and property destruction caused by terrorism affect banking supervision and structures.

With the aid of a mixed research method, this paper conducted 47 interviews. It extracted secondary data from the Central Bank of Nigeria database, the National Deposit Insurance Corporation publications, Enhancing Financial Innovation and Access Survey, the World Bank database and the Global Terrorism Index. Descriptive, content and regression analysis was used in this research.

With a significant regression model (p-value < 0.05), the analysis shows that terrorism accounts for 84.02% variation in banking administration. The impact of Boko-Haram on banking administration is negatively significant, especially in the areas like on-site supervision of Money Deposit Banks/Micro-finance Institutions and citizens’ accessibility to financial systems.

This paper generates new knowledge in the thematic area, which is still grey. The influence of terrorism on financial institutions as an element of economic governance is less researched. Hence, the strategic linkage of the impact of Boko-Haram on banking administration as a component of financial institutions. Therefore, this paper contributes to the existing body of literature on terrorism and economic governance.

The purpose of this paper is to draw attention to the effect of the growing informal financial sector (IFS) on the effectiveness of anti-criminal finance laws. Specifically, the growth of the IFS has been brought on by the unprecedented rise in refugee and migrant movement around the world. This paper will focus on how refugee smuggling in the Eastern Mediterranean and Western Balkan region – and the consequent rise of the IFS – has affected the suitability of apply anti-money laundering and financial action task force frameworks in these countries.

It assesses the effectiveness of national and international legal documents on anti-criminal finance. It also uses data sets and analyses secondary and primary sources to estimate the size and importance of the IFS.

The exponential and rapid growth of the IFS has undermined efforts to prevent the financing of trafficking, terrorism, corruption and money-laundering. The present legal devices to address criminal finance has been wholly inadequate and counter-productive.

There are limited reliable or accurate data available on the IFS, how much money goes through it or how important it is to criminal activities such as money laundering or terrorist finance. Without field-research, this study remains exploratory.

The growth of the IFS and migratory movement is a complex dilemma that must be accounted for when seeking to truly improve anti-criminal finance laws, especially in developing and transition countries.

This paper demonstrates the importance of considering the IFS and migratory and refugee movements in creating legal instruments to combat financial crime. It also suggests a direction for future research.

This study aims to analyze the financial inclusion of individuals living in the Middle East, North African, Afghanistan and Pakistan (MENAP). It intends to show the influence of these individuals’ characteristics on financial inclusion, using the World Bank Global Findex Database 2014 for 16 countries in the region.

A probit model is used to examine the marginal effect of financial inclusion of the characteristics of individuals living in the MENAP region. These characteristics include gender, age, income and education. Individual characteristics that are linked to the main financial-inclusion indicators include having a formal account and formal saving and borrowing. The barriers to having a formal account, alternative borrowing sources and motivations for borrowing are also linked to the respondents’ characteristics.

The results indicate that females and the poor are less likely to be included in financial systems, while education level enhances financial inclusion. As disadvantaged people consider access to credit is important to improving their lives, the study finds that the poor are more likely to borrow for medical issues than for other needs. While Islam is the majority religion in the MENAP region, it is not considered a barrier to having a formal bank account. Furthermore, people in different income quintiles are more likely to use informal financial sources, while the educated are more likely to use formal ones.

The results show that policymakers in MENAP should make more of an effort to enhance financial inclusion as a way to enhance economic development in the region. Also, governments institutions, such as central banks, financial ministries and other institutions, could build on these results to enhance financial inclusion as a way toward development in the MENAP region.

To the author’s best knowledge, this is the first study to examine the influence of individuals’ characteristics on financial inclusion in the MENAP region.

The management control and performance measurement literature reflects a long history of discussion related to organizational, team, and individual rewards. Yet, much of the research and guidance in the academic and managerial literature has been inadequate. Reflecting work on three current research studies, this chapter examines the gaps in our current understanding of the relationship of performance measurement, rewards, and performance and suggests some research questions that are of significant interest.

The purpose of this paper is to analyse the unintended consequences, financial exclusion, of counter-terrorism financing regulations in terms of their impact on financial inclusion and, consequently, the creation of an ineffective counter-terrorism financing framework. A further aim is to make recommendations to mitigate these unintended consequences.

This subject is examined by using the practices of a range of countries and organisations. The interdisciplinary approach of the paper is highlighted, which comprises criminal law, banking law, international law and human rights law.

Financial exclusion is a focal point that results in ineffective counter-terrorism measures which are caused mostly by the formal financial sector, in particular, the banking system. The financial exclusion also leads to counter-productive counter-terrorism financing through a low risk-appetite, de-risking, de-banking, financial exclusion and using unregulated or less-regulated and supervised financial systems.

No article comprehensively analyses financial exclusion as a consequence of counter-terrorism financing framework. The paper examines the process of counter-terrorism financing regulations, which leads to financial exclusion. In addition, the impact of financial exclusion on all relevant actors, such as individuals, correspondent banking relationships, money and value transfer services, charities and virtual currencies, is examined.