What you need to know:
- More companies continue to bring in new technologies to tap into the multibillion shillings’ remittances industry.
- Kenyans living abroad have been forced to seek side hustles to survive and still manage to send something back home.
Diaspora remittances declined by 3 per cent in the first four months of 2023, with Kenyans in the diaspora sending back Sh185.9 billion, compared to the Sh191.9 billion remitted during a similar period last year, the latest data from the Central Bank of Kenya (CBK) shows.
The decline has been attributed to a high cost of living in regions where Kenyans send much remittances from – mainly the US and Europe – which has depleted people’s incomes.
The development is as more companies continue to bring in new technologies to tap into the multibillion shillings’ remittances industry that has risen to become the single largest foreign exchange earning sector for Kenya, bringing in nearly half a trillion shillings last year.
Cost of sending money
More companies continue to introduce innovative services that address customer concerns in the sector, mainly the efficiency and cost of sending money.
Fintech startup, Grey, for instance, has entered the Kenyan market promising to lower the cost of sending money, while offering an international money transfer service that enables its users to send and receive international payments quickly and without restrictions.
The fintech enables its customers to have virtual international bank accounts and cards for free and enjoy a seamless foreign payment process, where users can create foreign USD, GBP and EURO bank accounts for free, send money to the UK and Europe, and receive payments from over 88 countries at affordable costs.
Burden on Kenyans
The US and Europe have been facing high energy, food and rent prices in the past year, a factor that has forced Kenyans living abroad to seek side hustles to survive and still manage to send something back home.
The CBK maintains that despite the drop in inflows, they remain supportive of the external balance of payments and foreign exchange, at a time the country has been battling a shortage of dollars.
Many Kenyans send back cash to cater for basic necessities at their homes, mainly education, healthcare, and household needs.
But with cost of sending the money still high – up to 9 per cent of the value being sent – players in the financial services sector have come up with more interventions to lower the cost and grow the remittances coming back, as well as reduce the burden on Kenyans working abroad.