Kisii, a county in South-western Kenya, has experienced a drastic transformation in recent years; a transformation attributed to the millions of shillings invested by Kenyan Diasporas around the world. In the last few years, Kenyans abroad have invested in residential and commercial properties, schools, hospitals and hotels, making Kisii one of the fastest growing counties in the country. This trend of growing remittance inflow can be witnessed across Kenya, with a recent report by the country’s central bank stating that Kenyans working and living abroad are now sending home four times more money than a decade earlier.
Between August 2017 and August 2018, nearly $260 billion ($2.55 billion) was remitted by Kenyans around the world, an increase of 41% compared to remittances received between August 2016 and August 2017. Since 2015, after overtaking earnings from tea exports, remittances have been the country’s biggest source of foreign exchange. Experts believe that these numbers could be even higher, as they only account for remittances sent through legal channels like banks and authorized money transfer operators such as Xpress Money. While these numbers are phenomenal, they tell a bigger story of how Kenyans living outside remit money to Kenya and contribute to the overall economy and progress of their home country.
As per estimates, three-fourths of the remittances sent by Kenyans abroad go into fulfilling family obligations and charity. Family obligations include food, healthcare, education, and other living expenses. Eventually, the money spent by families that receive remittances is funneled into the country’s economy. The remaining chunk of the remittances is directed towards investments or savings. The most popular investments for Kenyan Expats is real estate as it has proved to be a fruitful investment avenue so far. However, understanding the financial goals of the Kenyan diaspora, banks in Kenya are developing various investment instruments such as mortgages, that aim to turn expat remittances into wealth.
The rise in remittances comes as a beaming opportunity for the Kenyan government and the country’s financial services industry to develop an environment that is conducive for overall growth of the country’s economy. Bringing down the cost of remittance and developing more convenient ways to transfer money are also imperative to the cause. Transfer charges to Kenya, like other African country, still remains quite high. Although, the rising adoption of cheaper mobile money services such as Safaricom’s M-Pesa has helped bring the costs down, there is still a lot to be done. In our endeavor to make diaspora remittances to Kenya more economical and convenient, we have partnered with some of Kenya’s most trusted banks and financial institutions. Using Xpress Money, Kenyan expats around the world can send money to Kenya in various different ways – as cash at over 500 locations across the country, account credit in any Kenyan bank, or into any M-Pesa wallet within minutes.
Remittances, if utilized wisely, have the potential to radically transform the economy and state of receiving countries; and Kenya is only just beginning to prove this fact. With a growing sense of confidence in the country’s investment landscape, the next few years could see a further rise in remittances into the country.