Credit Bank has unveiled a joint partnership to tap into Kenya’s multi-billion-shilling diaspora market, as it looks to prop up product offerings in an increasingly competitive market.
The Affordable Remittances and Enhanced Financial Inclusion Program has been co-funded by the European Union and the International Fund for Agricultural Development (IFAD) at a cost of 50 million euros (Sh7.4 billion).
Other partners include the Kenya Diaspora Alliance, Interswitch East Africa, and Nyumba Mkononi, they will work with community networks and saccos to reach Kenyans living in rural areas.
Credit Bank CEO Betty Korir noted that this new program aims to lower the number of intermediaries in sending remittances, increase financial inclusion, and reduce remittance costs.
“Diaspora remittances have an integral role in emerging economies like Kenya and with an estimated $4 billion sent back home each year, they present a crucial source for foreign exchange and capital flows into the country, Credit Bank CEO Betty Korir said during the launch in Nairobi, on Tuesday.
“What we now need is to channel this crucial lifeline to our rural communities to facilitate the productive process that will boost the economy at large, she added.
Interswitch East Africa Limited Country General Manager Romana Rajput said working with Saccos and their members will make transfers quicker and more convenient to beneficiaries.
“Saccos form an important part of our financial services in Kenya where we come together to save money and improve the quality of our lives through lower interest rates loans to acquire important purchases like land, homes, educate our children, improve our businesses and much more,” said Rajput.
The new program, co-funded by the European Union and IFAD (International Fund for Agricultural Development), will be underpinned by digital money transfer solutions to ensure affordability and seamless remittances to the last mile.
Participating SACCOs will also have their members and staff trained as sub-agents for rural areas.
This will involve capacity-building sessions to strengthen their legacy financial platforms and bring them at par with leading service providers.
Kenyans sending funds from Germany for example through Ria-Credit Bank digital platforms will pay just 3 per cent of the sent amount.
The program aims to benefit 1,200 Kenyans in the diaspora and facilitate at least 1,500 recipients back home to open a bank account for the first time.
The program is also focused on deepening financial inclusion for rural remittance recipients through SACCO accounts, with over 1,200 SACCO members receiving remittances directly through Credit Bank–Ria platforms and another 1,350 SACCO members receiving financial literacy training.
According to the latest data from the Central Bank of Kenya, the cumulative remittance inflows for the 12 months to March 2023 totalled USD 4,020 million compared to USD 3,912 million in a similar period in 2022.
Reducing Cost of Transferring Remittances Top on CBK’s Agenda
