The Evolution of Kenya’s Diaspora Remittance

By Soko Directory Team / Published May 31, 2023 | 3:56 pm



Dollar

Kenya, like many other African nations, is highly reliant on diaspora remittance to prop up its economy. Money sent home by Kenyans living abroad has grown exponentially over the past decade.

The Central Bank conducted Kenya’s first Diaspora Remittances Survey which indicates that inflows to Kenya have increased tenfold in the last 15 years, reaching an all-time record of $4.027 billion (Ksh559.57 billion) in 2022.

This phenomenal growth points to the importance of remittances as a source of foreign exchange to the country, equivalent to more than 3% of the country’s GDP.

Kenya is now earning more foreign exchange from diaspora remittances than each of its major exports – coffee, tea, and horticulture – despite the persistent criticism of its poor diaspora policy.

Related Content: How Diaspora Remittances Have Shaped Kenya’s Economy

When it comes to sending and receiving money from abroad, data indicates that poor exchange rates, high fees, and commissions may highly reduce the amount of funds received at the end of the transaction.

From back in the day when hard cash, money orders, and cheques would be sent via snail mail, there are now an increasing number of ways to send money back home that are cheaper and less time-consuming.

This, as technology has made the process of sending and receiving money easier and faster, making the global market more accessible and less daunting, which in turn gives people a wider range of options.

While the majority of Kenyans overseas send money home for household needs such as rent, education, and medical expenses, more people are sending money for long-term investments in sectors such as real estate, agriculture, and retail.

In recent years, investment companies have focused on linking Kenyans in the diaspora to local investment opportunities.

However, the cost of sending money back home is still a key barrier to the growing diaspora remittance. With this in mind, relaxing legal barriers and remittance costs will be crucial to the future growth of Kenya’s economy.

On average, Sub-Saharan Africa, including Kenya, is the most expensive region in the world to send remittances to.

According to a World Bank report, it costs 8.9 percent of the transfer value to send money into the region, compared to the global average of 6.8 percent.

While this has reduced from 10.14 percent in 2014, there is still plenty of room for improvement in order to attract more remittances from Kenyans living abroad.

The government has so far taken the right step by establishing the State Department for Diaspora Affairs.

Related Content: Why Do Kenyans In The Diaspora Love Digital Remittance Platforms?

This is where Grey comes in. The firm recently announced its entry into the Kenyan market as part of its plans to expand into the greater East African region.

Founded in 2021, Grey, a Y-combinator-backed fintech startup, offers an international money transfer service that enables its users to send and receive international payments quickly and without restrictions.

It enables its customers to have virtual international bank accounts and cards for free and enjoy a seamless foreign payment process.

Users can create a foreign USD, GBP, and EURO bank account for free, send money to the UK and Europe, and receive payments from over 88 countries.

Using advanced international money transfer solutions, gig workers, digital nomads, and diasporas can now be there for their loved ones when it matters the most. With Grey, you can quickly and easily send and receive money across borders, playing a major role in improving financial prosperity and economic development for the region.

Related Content: Diaspora Remittances Drop For The First Time In 13 Years




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2024
  • January 2024 (238)
  • February 2024 (227)
  • March 2024 (190)
  • April 2024 (133)
  • May 2024 (70)
  • 2023
  • January 2023 (182)
  • February 2023 (203)
  • March 2023 (322)
  • April 2023 (298)
  • May 2023 (268)
  • June 2023 (214)
  • July 2023 (212)
  • August 2023 (257)
  • September 2023 (237)
  • October 2023 (266)
  • November 2023 (286)
  • December 2023 (178)
  • 2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (358)
  • April 2022 (292)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (232)
  • December 2022 (167)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (272)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950