Money transfer firms replace banks in crisis-hit Lebanon

Beirut: Like many people in crisis-hit Lebanon, Elias Skaff used to wait for hours to withdraw cash at the bank but now prefers money transfer companies as trust in lenders has evaporated.

Anyone who relies on traditional banks to receive their money "will die 100 times before cashing it", said Skaff, 50, who has survived Lebanon’s three-year-old economic downturn with the help of US dollar payments from a relative abroad.

Once the flagship of Lebanon’s economy, the banking sector is now widely despised and avoided after banks barred depositors from accessing their savings, stopped offering loans and closed hundreds of branches and slashed thousands of jobs.

Last month, a local man was widely cheered as a folk hero after he stormed a Beirut bank with a rifle and held employees and customers hostage for hours to demand some of his $200,000 in frozen savings to pay hospital bills for his sick father.

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

Skaff said he now receives his money via a Beirut branch of Western Union’s Lebanese agent OMT, which says it operates more than 1,200 branches nationwide and handles 80 percent of money transfers outside the Lebanese banking sector.