Diaspora remittances hit new Sh37b record in July
Kenyans abroad sent home $336.7 million (Sh36.9 billion) in the month of July, breaking the previous monthly record of $315.8 million (Sh34 billion) set in May.
The July diaspora remittances represent a 21.6 per cent growth compared to $277 million (Sh30.4 billion) received in the same month last year.
United States was the largest source of remittances into the country, accounting for 58.3 per cent of the July remittances.
The cumulative inflows up to July are higher by Sh63.6 billion compared to same last year, according to Central Bank of Kenya (CBK).
“The cumulative inflows in the 12 months to July 2021 totalled $3,442 million (Sh377.1 billion) million compared to $2,862 million (Sh313.5 billion) in the same period in 2020, a 20.3 per cent increase,” the banking sector regulator said in a weekly release.
Diaspora remittances have performed well in the recent past with Kenyans abroad sending home Sh33.1 billion in June and Sh34 billion in May.
June data published by CBK shows that North America is the largest source of remittances followed by Europe and the rest of the world in that order.
Churchill Ogutu, the head of research at Genghis Capital says partnerships between local financial players and money remittance providers have made it easier for Kenyans living abroad to send money home, hence, the improved performance.
“It could be due to some partnerships we have seen between the money remittance providers and some of the banks locally. It’s much easier to transact unlike before,” he said.
M-Pesa Global, a Safaricom product launched in 2018 allows customers to make and receive payments from 200 markets across the world and has partnerships with Western Union, MoneyGram, Ria, and WorldRemit among others.
Money transfer entities
In addition to its Equity Direct platform, Equity Bank has partnered with over 10 money transfer entities, including Western Union, PayPal, WorldRemit, MoneyGram and hellopaisa.
In the first three months of 2021, Equity handled remittances worth Sh82 billion, an 87 per cent increase compared to the Sh44 billion it handled in the first quarter of 2020.
At the beginning of the pandemic in 2020 there were fears that remittances would take a hit after several countries around the world went into lockdown.
However, support by rich countries to their populations helped reduce the impact of the job cuts and helped Kenyans abroad send more money back home to support their relatives during the pandemic.
Diaspora remittances are a key source of foreign currency for Kenya and are also used to support many livelihoods.
Kenya’s foreign exchange reserves stood at $9,189 million (Sh1 trillion) as at August 19, equivalent to 5.62 months of import cover.
According to WorldRemit, a global payments company, education, healthcare, and household needs are the main uses of remittances in Kenya.