The Kenyan Diaspora accounts for 3% of the country’s GDP, beating big sectors like mining which stands at 1.08 per cent.
In 2014, remittance inflows to Kenya increased by $137 million or (11%) to $1,428.5 million compared with $1,290.6 million in 2013. The 12 month average flow during the same period sustained an upward trend to $119.0 million from $107.5 million over the same period. In the month of December 2014, remittance inflows increased by 14.2% to USD 130.2 million from $114.0 million in November 2014.
The increase in remittances has prompted the banking industry to provide banking solutions beyond savings accounts and sending money to relatives. Chase Bank’s Diaspora banking offers a one-stop financial solutions shop in banking, investing and insurance services. Chase Bank through its subsidiary Genghis Capital supports Kenyans in the diaspora to invest in the robust Nairobi Securities Exchange. The bank’s goal is to empower Diaspora investors living abroad to personally and professionally bank or invest their hard-earned money.
“The opening up of investment opportunities to citizens by the government, and the rapid growth and revolution of the financial services sector in Kenya can be attributed to the increase in remittance inflow as well as more investments established in the country”. Said Mr Paul Njaga, CEO Chase Bank.
Speaking during the Kenya Diaspora Investment Conference opening dinner, Mr Njaga added that the government has incentivised the diaspora community in a bid to tap remittance inflows into the country and into the formal economy, where it is easier to quantify and utilize these resources. For instance, the government has tried to formalize the use of remittances through offering Diaspora Infrastructure Bond to encourage the Diaspora community to invest in the country’s infrastructure.
“Diaspora remittances is one of the Vision 2030 flagship projects under the financial sector, the government recognises the role these remittances play in national development. At a continental level, the African Union in 2003 declared the African Diaspora as the sixth development region of the continent, since the Diaspora potential needs to be fully exploited in building Africa.” Said Mr. Paul Njaga.
Remittances sent to Kenya are used to support domestic investments such as buying land, housing and agricultural improvement, meeting household consumption needs, financing both short term and long term development projects such as real estate as well as providing money for families during crisis.
Last year, in May, the Central Bank of Kenya ranked Chase Bank 5th in Money Transfer Remittances from the Diaspora with volumes of $9.3M for the month of March.
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