Stung by Covid-19, Kenyans turn to kin abroad for aid

Money Transfer

Money transfer across the globe. Massive job losses due to restrictions left many Kenyan families unable to meet their basic needs forcing them to turn to their friends and relatives abroad.

Photo credit: File

Kenyans turned to their friends and relatives abroad for cash to buy food, pay rent and meet other household needs following massive job losses at the height of the Covid-19 crisis.

This is according to Kenya’s first ever survey on diaspora remittances whose results were released by the Central Bank of Kenya (CBK) on Thursday.

The survey also found that the pandemic badly hit the finances of the diasporans, cutting their average annual support for their friends, relatives or business partners in Kenya to $4,000 (Sh454,000) in 2020 from $6,000 (Sh681,000) in 2019.

However, their dependants were having it rougher locally after the pandemic saw millions lose their jobs as others had their salaries slashed, forcing them to extend begging bowls.

“Despite this lower average amount sent in 2020, the respondents reported increased demand for financial support by recipients,” showed the findings.

The study, which attracted 1,321 respondents, was conducted between March 19 and May 17 last year. It sought to test the efficiency and cost of channels diasporans use to send money to Kenya, their alternatives, and the difficulties in cash and non-cash remittances.

It also identified how the remittances are used, and showed the level of information the diaspora has about local investment opportunities.

The Kenya National Bureau of Statistics says about 1.72 million workers lost jobs in three months to June 2020 when Kenya imposed Covid-induced lockdown that led to layoffs and pay cuts.

It says the number of people in employment fell to 15.87 million between April and the end of June that year compared to 17.59 million the previous quarter.

Kenya has since gradually reopened the economy, including resumption of learning in schools, lifting of the dusk-to-dawn curfew and easing movement restrictions, thus boosting job creation. However, Kenyans living abroad said they expected to increase financial support to those who rely on them in Kenya.

The survey revealed that over 70 per cent of the respondents sent remittances in cash through formal channels, mainly money transfer firms, banks and mobile money operators. It showed money is sent regularly, especially monthly to nuclear family members, to largely cater for basic needs such as food, medicine and education expenses.

Most recipients are self-employed, jobless or students, indicating relatively high dependence of Kenyans on the diaspora.

Slightly over half of the remittances were allocated to investment in real estate, mortgage payment, and purchase of food and household goods.

The findings come days after the CBK released data showing record Sh39.75 billion remittances last month, driven by an economic rebound in key source markets such as the US, Europe and the Middle East.


Welcome!

You're all set to enjoy unlimited Prime content.