A new survey by the Kenya National Bureau of Statistics (KNBS) has revealed that most of the billions of shillings sent home by Kenyans living abroad is being used to meet daily household needs, with only a small portion going towards investments and wealth creation.
The findings, contained in the 2025 Remittances Household Survey, show that Kenyan households received an estimated Ksh 931.8 billion in remittances between June 2024 and May 2025. The amount included Ksh 848.3 billion sent in cash and Ksh 83.5 billion received through goods and other forms of support.
The survey highlights the growing importance of diaspora money in supporting households across the country, especially at a time when many families are grappling with the high cost of living. However, it also points to a missed opportunity, with most recipients spending the funds on immediate needs rather than channelling them into investments that could generate future income.
According to KNBS, food and household purchases accounted for the largest share of remittance spending, with 73.1 per cent of recipient households using the money for this purpose. Education followed at 31.4 per cent, while healthcare accounted for 23.9 per cent. Many households also used the funds to pay rent, buy clothing and cover utility bills.
“The findings showed that remittances were predominantly used to support household consumption, serving as a critical buffer against economic vulnerability and helping households meet essential day-to-day requirements,” the report stated.
The findings suggest that for many families, remittances have become more of a survival tool than a source of investment capital. With inflation and rising living expenses continuing to squeeze household budgets, many recipients appear to have little choice but to use the money to cover basic needs.
Investment-related spending remained relatively low. Only 8 per cent of households used remittances for farming activities, while 2.6 per cent invested in construction projects. Real estate investment accounted for just 2.2 per cent, despite the common perception that diaspora funds are largely directed towards buying land and building homes.
The report challenges the long-held belief that remittances are primarily used to finance major development projects. Instead, it paints a picture of households relying on support from relatives abroad to maintain their standard of living and manage economic pressures.
The survey comes as remittances continue to cement their position as one of Kenya’s leading sources of foreign exchange. In recent years, diaspora inflows have consistently grown and, in some cases, surpassed earnings from key export sectors.
The United States remained the largest source of remittances to Kenya during the survey period, contributing nearly half of all inflows. Other significant sources included the United Kingdom, Canada, Australia and countries in the Middle East, where thousands of Kenyans work and send money home regularly.
Despite the substantial inflows, KNBS found that participation in formal savings and investment products remains low among recipient households.
“Allocation of remittances to savings, formal investments and financial instruments was limited, indicating untapped potential for leveraging remittances for wealth creation and financial deepening,” the report said.
The findings are likely to fuel discussions on how Kenya can better harness diaspora money to support long-term economic growth. Analysts have previously called for the development of more attractive savings products, investment opportunities and financial literacy programmes tailored to remittance recipients.
As diaspora inflows continue to rise, experts say the challenge will be finding ways to help households balance their immediate financial needs with long-term investment goals. While remittances remain a lifeline for millions of families, the KNBS survey suggests they could play an even bigger role in driving wealth creation and economic development if more of the money is directed towards productive investments.
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