Bedouin Banking


I am trying to explain the principles of the Credit Crunch to the Bedouin. What sub-prime debt is and why the banks are in such trouble. The problem is explaining virtual money. The Bedouin deal in cash, and cash only. All transactions are done on the spot and in cash. Cash is real; you can touch it, smell it, feel it and mess around with it. You know where you are with cash. You do not know where you are with sub-prime debt, because you cannot touch it. It has no substance. This is confusing to the Bedouin. Where did all the money go they ask, who has it?

So I explain that if the value of something (like a house) goes up then I can borrow against that value. But there is no physical money associated with the value. The value of the house goes up because people think it is worth more, not that it actually is worth more. It’s about perception, and we can borrow money against this perception. But perceptions are not set in stone, they can change and move. So one day your house has lots of value and the next it doesn’t. Lots of very smart people decide their perception is wrong and suddenly we have a world banking crisis. And now you owe the bank a lot of money against a house that is worthless. Big problem for some.

Bedouin BankersBut not for the Bedouin. They do not buy mortgages or get bank loans. They deal in cash. If they need to make a big purchase then they will go to their family and everyone puts money in the pot. There is a collective attitude to money within the family. This means they have no debts.

And if the family has no money or not enough then they go to one of the tribal leaders (a Sheikh) and get a loan. Because they are strict Muslims, they will not be charged interest but instead will owe a favour to the Sheikh as well as the repayment of the loan. This means the nightmare of debts getting bigger and bigger due to interest payments never happens. So debts are paid off as and when they can be afforded and they never get bigger due to interest. This means the Bedouin are probably the most credit-worthy people on the planet.

When you have such a simple attitude to money the entire concept of modern banking becomes not just ridiculously complicated but completely illogical. Mr Westerner makes money out of thin air, based upon perception and then complains when the money (that was not there in the first place) turns out definitely not to be there at all. But they have already spent the money (that wasn’t there) and now they have to pay it back.

Suddenly, Mr Westerner does not look so smart in the eyes of the Bedouin and they sit there, smoking their cigarettes and quietly smiling to themselves at the idiocy of the outside world.

Bedouin Paths runs ethical hiking tours out of their Bedouin Camp in St. Katherine in Sinai. Contact Mark at or visit the website at


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