09/13/2011 11:42 EDT | Updated 11/13/2011 05:12 EST

Money transfers lifeline for Somalia famine

Members of Ottawa's Somali community say a previously controversial money transfer system is an essential lifeline for those suffering during Somalia's famine.

Somali brokers use "Hawala" payments as an informal transfer system to send small amounts of money back to family members in need. They are important, say brokers, because Somalia does not have banks.

But after Sept. 11, 2001, U.S. officials believed the payments were being used by al-Qaeda to move money around the world. Former U.S. president George W. Bush even referred to them in a speech saying, "By shutting these networks down, we disrupt the murderers' work."

The increased fear and scrutiny surrounding the financial sector spread to Ottawa convenience store owner Liban Hussein, who also handled the payments, rocking Ottawa's Somali community.

Hussein was soon exonerated, but brokers said they were forced to convince the government the transfers were not a threat.

"We explained to the authorities what Hawala is, and what Hawala does, and how Hawala is the lifeline," said Imam Ahmed Hassan, a former broker who negotiated to legalize the payments.

Hassan, who is now leader of Ottawa's largest mosque, also said brokers laid low in fear for most of the past decade. But eventually they were able to explain why Hawala is vital to those in Somalia.

"I could say Hawala is the 911 of the Somali people. The money sent by the Diaspora is the backbone of the Somali economy," said Hassan.

Many countries are sending money and food as aid to Somalia to help with the current famine, but Somali-Canadians have insisted Hawala has stopped the disaster from getting worse.