About half of the total diaspora remittances in 2021 were allocated to investment in real estate (land and buildings) for recipients, mortgage payment for senders, and purchase of food and household goods.
This is according to Diaspora Remittances Survey by the Central Bank of Kenya (CBK) which discovered that diaspora remittances in Kenya reached a record high of USD3,718 million (Ksh422.1 billion) as compared to USD3,094 million (Ksh35103 billion)set in 2020.
The amounts are equivalent to approximately 3 percent of Kenya’s GDP. However, only inflows through formal channels (through authorized international remittance service providers in Kenya or commercial banks) are included in the reported inflows, which exclude remittances through informal channels and in-kind remittances.
The survey found that most remittances are directed at family members, who are largely self-employed, unemployed, or students.
The Survey also confirmed the importance of mobile money operators and money transfer companies, in addition to banks, as the main channels for cash remittances.
Further, the Kenyan diaspora prefer digital service providers due to convenience, promptness, and ease of access. On average, recipients receive remitted funds on the same day, reflecting the efficiency of these channels.
Key problems that were identified included the high cost of remitting cash, and the inadequate information on investment opportunities in Kenya for the remitters.
The Survey was conducted from March to May 2021, aimed at collecting valuable information on remittance inflows to Kenya, with the objective of boosting the role of remittances in supporting the economy and livelihoods.
“The information gathered through the Survey included: the efficiency and cost of alternative remittance channels; the difficulties in remitting cash or non-cash transfers; the availability of information to Kenyans in the diaspora about investment opportunities in Kenya; and the usage of remittances received,” said CBK in a statement.
“The Survey targeted Kenyans living abroad who had sent remittances in 2019. The respondents were reached with the support of the Ministry of Foreign Affairs and especially the Kenyan missions abroad, diaspora organizations, and other stakeholders. The Survey was conducted through an online questionnaire and attracted 1,321 respondents.”
Read: Loan Apps Race to Beat CBK Registration Deadline
>>> Co-op Bank Taps Into Diaspora Remittances
Leave a comment