Libyans turn to bank cards as cash runs out
- Libya is experiencing a cash shortage in its banking system, leading many people to seek alternative payment methods.
- Young generations, particularly in cities like Misrata, are increasingly adopting bank cards for transactions despite limited infrastructure.
- The shift towards cashless payments reflects deeper problems in the banking system and a response to ongoing financial instability in the country.
Libya has faced significant challenges in its financial system due to cash shortages stemming from prolonged periods of instability and conflict. The situation has deteriorated following the 2011 uprising that ousted longtime dictator Moamer Kadhafi, leading to a fragmented political landscape and economic issues. As a response, many Libyans are now opting for cashless transactions, particularly younger generations who are more open to using bank cards for payments in cities like Misrata, which is located about 200 kilometers from the capital, Tripoli. Despite the growing interest in cashless options, numerous obstacles hinder the widespread adoption of bank cards. The current banking infrastructure is inadequate, as there are limited ATM machines, and many vendors remain unprepared to accept card payments due to a lack of necessary equipment such as payment terminals. This has made it difficult for many people to utilize bank cards effectively, forcing them to carry cash nonetheless. The previous cash crisis has roots in mistrust towards the banking system, which has led to a significant reluctance among individuals to deposit money. Libyans have become accustomed to handling cash directly rather than relying on banks, as evidenced by lengthy lines outside banks where people wait for hours trying to withdraw cash. In 2022, the central bank withdrew certain banknotes from circulation due to issues with counterfeiting, which further complicated interactions in the market, contributing to a cash crunch. As withdrawal limits were imposed and money supplies diminished, the shift towards bank cards gained momentum despite the accompanying challenges. Efforts to remedy the crisis have included moves by the central bank which injected a sizable amount of cash into the system while encouraging banks to expedite the issuance of cards to customers. Some locals express optimism about the transition to a more digital payment system. However, ongoing issues with infrastructure and public acceptance remain critical factors in determining whether this trend towards cashlessness will take hold or if it will stall due to the prevailing conditions in the Libyan economy.