Digital Transfers Safe Bet for Kenya Remittances; Cost at 4pct

f Kenya’s first Diaspora Remittances Survey, conducted between March and May 2021. Remittance inflows to Kenya have increased tenfold in the last 15 years reaching an all-time record of USD 3,718 million in 2021.

About half of the funds remitted by Kenyans in the diaspora are invested in real estate, mortgage payment and to meet family expenses, according to Central Bank’s Diaspora Remittances Survey.

The remittance flows to Kenya have increased tenfold in the last 15 years reaching an all-time record of USD 3,718 million in 2021. This is equivalent to more than 3 per cent of Kenya’s Gross domestic product (GDP). 

Level of Education and Professional Training

The Survey indicated that income levels are lowest in Asia and East Africa where the majority of respondents earn less than USD 2000 (Ksh 200,000) per annum, which is a pointer to the type of jobs held by migrants, particularly in Asia where a high proportion of migrants take up low-skill jobs. 

“Comparing income levels and age of the respondents, the survey revealed that the majority of those earning annual incomes less than Ksh 226,000 (USD 2,000) are primarily young individuals with 45 per cent of them aged under 30 years,” part of the report reads. 

“This points to the likelihood that the younger the individual (hence less experience), the more likely they are to earn lower wages. Concomitantly, those who earn more than Ksh5.6 million (USD 50,000) are older respondents aged between 31 years old and 45 years old (60 per cent).”

A majority of Kenyan workers in the diaspora made their money through Human Health and Social work activities which represents 12 per cent of the workers.

Other jobs include Finance and Insurance activities (10 per cent), Education (8 per cent), Professional, scientific and technical activities (8 per cent) and Information and communication (8 per cent).

Seven per cent of individuals surveyed noted that they were not employed while 6 per cent made their fortunes through international organizations and bodies. 

In terms of cost, the average cost of sending money in th review period using courier companies was 29.2 per cent higher than the value being remitted.

Cost of Remittances

Courier firms were deemed most expensive when compared to mobile money operators where the average cost of remitting was 4.7 per cent of the amount being remitted while the cost for money transfer companies was 4 per cent and banks 3.7 per cent. 

“The survey revealed that over 70 per cent of respondents reported remitting cash mainly sent through formal channels, predominantly money transfer companies, banks and mobile money operators. Remittances were sent to meet the basic needs of nuclear family members of the respondents. Notably, cash was remitted, typically on a monthly basis, for the purpose of purchasing food and household goods, to offset medical expenses, meet education expenses, for payment of rent and household utilities, and farming needs,” CBK found. 

Europe-Kenya and Asia-Kenya corridors had a relatively higher cost of remitting averaging 6 per cent of the value of remittances when compared to the rest of Africa-Kenya, Latin-America and Caribbean-Kenya and North-America-Kenya corridors which averaged 4 per cent, 3 per cent and 2 per cent respectively.

Sub-Saharan Africa Most Expensive Region to Send Diaspora Remittance – World Bank

Safaricom Plc M-Pesa emerged as the most preferred channel of sending money accounting for 25 per cent share, banks 16 per cent, WorldRemit 14 per cent, Wave 9 per cent, Sendwave 8 per cent, Western Union 8 per cent and other channels 20 per cent.

“The main reasons for using these channels were convenience, favourable transaction charges, favourable exchange rates, security and safety. The respondents however highlighted that they faced certain challenges while remitting cash including cost, hidden charges and fees, accessibility of service and privacy.”

Between March and May 2021, the central bank conducted its first Diaspora Remittances Survey. The data was collected from Kenyans working/living abroad who had sent remittances to Kenya in 2019. 

The Survey attracted 1,321 respondents -Europe (28 per cent), North America (27 per cent), Asia (22 per cent) and African countries (16 per cent).

The Survey focused on the efficiency and cost of alternative remittance channels; the difficulties encountered in remitting cash or in-kind transfers; the availability of information to Kenyans in the diaspora about investment opportunities in Kenya; and the usage of remittances received.

Reducing Cost of Transferring Remittances Top on CBK’s Agenda


In my role as Community Engagement Editor For Khusoko, I care about our audience. engaging them, getting news delivered to them across a variety of platforms, and expanding the diversity of voices on our website.

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