Cash cri­sis pushes scep­tic Libyans to vir­tual pay­ments Bank rush

Muscat Daily - - OPINION - Ibrahim Ab­dal­lah

When a cash cri­sis struck the war-torn North African coun­try of Libya, many peo­ple were forced to queue up for days to with­draw their sav­ings.

But elec­tronic pay­ments sys­tems set up to tackle the dearth of cash have strug­gled to gain cred­i­bil­ity.

Said Fayez Fad­lal­lah (35) uses a mo­bile phone app to pay for gro­ceries at a large su­per­mar­ket in sec­ond city Beng­hazi.

“Now I don’t have to spend hours or even days queue­ing at the bank to with­draw cash,” he said. “They re­ally solved a prob­lem for us.”

Years of vi­o­lence and po­lit­i­cal chaos since a 2011 NATO-backed up­ris­ing that top­pled and killed long­time dic­ta­tor Muam­mar Gaddafi have left Libya’s state in­sti­tu­tions in cri­sis - in­clud­ing the cen­tral bank.

In 2014 it split into two, with the dif­fer­ent branches over­seen by ri­val gov­ern­ments in the west and east.

The re­sult­ing cash cri­sis, fu­elled by spi­ralling in­fla­tion, caused huge queues to form at the banks and left many peo­ple un­able to ac­cess their salaries.

In re­sponse, the banks have launched elec­tronic pay­ment sys­tems.

In Beng­hazi, the Bank of Com­merce & De­vel­op­ment’s (BCD) Ed­fali (Ara­bic for ‘pay me’) and Wahda Bank’s ‘Mo­biCash’ al­low users to buy goods, pay restau­rant bills and ac­cess phar­ma­cies and hos­pi­tals.

But not ev­ery­one is happy. At the exit of the same Beng­hazi su­per­mar­ket, his arms full of pro­duce, Ay­man al Obeidi (46) said the new pay­ment sys­tems were not work­ing.

“We were told that prices would re­main un­changed” com- pared with cash prices, he said. “But we saw a 40 per cent in­crease on pay­ments with Ed­fali,” Obeidi said. Many Libyans have not had free ac­cess to their bank ac­counts since 2014.

Brav­ing cold in win­ter and blis­ter­ing heat in the sum­mer, they rushed to the banks on hear­ing ru­mours of cash de­liv­er­ies and queued for hours with­out any guar­an­tee they would be able to ac­cess their own money.

“Peo­ple don’t trust the banks any more,” one bank em­ployee told AFP, speak­ing on con­di­tion of anonymity.

“They want to be sure they can get enough cash in case anything hap­pens and the banks close, or if they can’t leave their houses.”

Em­ploy­ees of Libya’s vast pub­lic ser­vice still have their salaries paid di­rectly into their ac­counts. Many have turned to elec­tronic pay­ment sys­tems to ac­cess their money.

Such ser­vices al­low buyers to credit the seller’s ac­count. They then re­ceive an SMS mes­sage con­firm­ing com­ple­tion of the trans­ac­tion.

Wahda Bank’s spokesman Al Mo­tassem al Fi­touri said trans­ac­tions via Mo­biCash are ‘very se­cure’. “It is not even nec­es­sary to have a smart­phone, nor does the mer­chant have to have a point-of-sale de­vice,” he said.

The banks are aware that the ser­vices are open to abuse, how­ever. On its web­site, the BCD en­cour­ages cus­tomers to re­port price hikes on pay­ments via Ed­fali. And many busi­nesses that were en­thu­si­as­tic at first have since dropped the ser­vice.

Salah al Agouri, a busi­ness­man whose clients pay him us­ing Ed­fali, is crit­i­cal. “It as­sured us that we would be able to with­draw cash to the value of 25 per cent of sales via this ser­vice, but that wasn’t the case.”


A Libyan man uses a mo­bile phone app to pay at a store in Beng­hazi

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