Hawalas are typically small businesses that do transfers as a side business, but some exist only for that purpose.
They typically don't ask any information about the money that they are transferring, and only provide a number to the person sending the money, to be used as a password at the receiving end to get the money. Records are only kept as to the amount of money transfered, and the other hawala member transferred to. After the books are balanced between the two members (typically by a transfer by someone else the other way) the records are destroyed.
They are popular due to their anonymity, speed of transfer and low cost (some dealers don't charge a fee, making their income from exchange rate changes).