In May 2021 alone, Kenyans living abroad sent home a record Ksh34 billion ($316 million), a 22% increase from the corresponding period in 2020. Defying the effects of the Covid-19 pandèmic, this jump was actually the first time diaspora remittances had crossed the $300 million (Ksh30 billion) mark, with the United States maintaining its grip on the log as the largest source of diaspora inflows to Kenya at 60%.
By the close of May 2021, diaspora remittances had hit Ksh122 billion over the four-month period under review. In the 12 months to May 2021, the cumulative inflows yielded Ksh363.3 billion ($3.365 billion).
Perhaps in recognition of diaspora remittances in economic growth, big banks including Co-operative Bank of Kenya, have recently taken a lead role in helping Kenyans living abroad remit funds to their dependents back home, offering them various options for this premium service.
With regular remittances finding their way back home to the benefit of their families, Kenyans in the diaspora have been lauded for their role in nation building, with reports that Kenya tops other sub-Saharan African in receiving diaspora remittances.
According to the World Bank, much of the remittance by migrant workers make to their countries of origin – estimated to be three times the amount of aid budgets of wealthy donor economies – is not utilized productively. This, according to the report, can be attributed to limited knowledge. However, much of the money is not put to productive use, largely due to unavailable investment opportunities and lack of the technical knowhow.
With the huge sums involved, such inflows have become an important player in Kenya’s economic growth and development, an ideal component of enhancement for poverty reduction.
Co-operative Bank and other industry players have tapped into this private wealth, essentially assisting Kenyans living and working abroad access financial services locally – and in turn aiding economic growth as well as lifting the country’s development agenda.
Diaspora remittances were known to help households productively invest in businesses, land, housing and farm machinery as opposed to spending on food, clothing, weddings and high-end vehicles.
With Co-op Bank and its contemporaries now offering financial services to this segment through a wide array of accounts, benefactors and their beneficiaries can now easily find help as well as access multiple financial and investment services at their disposal.
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