It’s also known as hewala or hawala, or most commonly, hundi. It is the practice of transferring money or a halal money transfer system based on a huge money brokers system in the Islamic world.
However, since a vast number of Muslims have expatriated in the Western world, there is an increasing demand in halal money transfer services which will ensure that no haram practices interfere in the process. Thousands of Muslims send money home when working abroad, to their friends and family, and, at the same time, thousands of Muslim university students are in need of a halal money transfer service that will ensure funds arrive on time but also in a Shariah-compliant way.
Many of you may have thought, is generally the practice of sending money abroad halal?
According to Ibrahim Khan, Islamic Finance Guru’s editor, there is no prohibition in the Islamic Law with regards to transferring money abroad. What is prohibited, though is third parties making profit out of it. So, generally money transfer is allowed in Islam, but there are certain grey areas.
Things to look out for, for instance include companies that do not have a financial authorities licence in the country you are sending money to or from, which suggests that their activities may not be Islamically acceptable and halal. Another type of agents to watch out for are the ones who operate under a fixed exchange rate model, which, though not necessarily, may indicate that they are making margins out of the exchange rate, which would constitute haram according to the Islamic finance rules.
In addition to that, other transfer models that may imply non-transparency are the ones that pay cash in advance to your the receiver and you can complete the payment on a later date – most likely for a fee.
One company that we recommend as a Shariah compliant agent, is TransferGo. It is widely used by a great number of expats in European countries and in the UK and became increasingly popular due to its fair and flexible practices. With TransferGo you can send money abroad cheaper than a bank within the next business day and for a low fixed fee which guarantees transparency.