Kenyan companies rush to tap diaspora market

• KCB, CIC Insurance and Nation Media Group, are some of the players in the insurance, banking and money transfer business which have joined Safaricom, Chase, Co-op, Equity and Gulf African Bank to take their services and products to Kenyans living abroad.
• Remittances from the diaspora stood at Sh74.8 billion last year, rising 55.3 per cent from Sh48.1 billion in 2007, with most of the money going into investments and support of dependants.
• Players say they are offering greater convenience in money transfers and more reliable financial services to the diaspora which has suffered major losses from fraud by relatives and friends.

Kenyan companies are rushing to tap the huge financial opportunities in the diaspora as remittances continue to rise sharply.

KCB, CIC Insurance, and Nation Media Group, are some of the players in the insurance, banking and money transfer business which have joined Safaricom, Chase, Co-op, Equity and Gulf African Bank to take their services and products to Kenyans living abroad.

Remittances from the diaspora stood at Sh74.8 billion last year, rising 55.3 per cent from Sh48.1 billion in 2007, with most of the money going into investments and support of dependants.

Players say they are offering greater convenience in money transfers and more reliable financial services to the diaspora which has suffered major losses from fraud by relatives and friends.

“There is a huge opportunity in the diaspora market,” said Nelson Kuria, the chief executive of CIC Insurance.

“The remittances we see today can rise further if Kenyans in the diaspora can find reliable means of investing their money. Many complain of being ripped off by relatives,” he said.

CIC, which plans to put up property on its 200-acre land in Kiambu, says Kenyans in the diaspora have expressed interest in 300 houses.

Property is the most preferred investment class by Kenyans abroad who seek to profit from rents or capital gains, with some also buying or building homes to live on return home.

Returns from Kenya’s property market are stable and have beaten those in the volatile equities and bonds in the past decade, largely due to increased demand amid inadequate supply of residential and office blocks.

Kenyans have relied heavily on friends and relatives to buy or build houses, exposing them to major financial losses after the money is diverted for other uses.

Mr Kuria says CIC is offering insurance covers to businesses and relatives of Kenyans abroad for whom it is also identifying investment opportunities.

KCB, the largest player in the mortgage market, is keen on tapping the diaspora market, riding on its consumer and corporate banking divisions.

In a recent exhibition in London during the Olympic Games, KCB opened 300 accounts for Kenyans living in the UK with a total balance of Sh3 million.

Northern America accounts for about 45 per cent of total remittances, followed by Europe (30 per cent), with the rest coming mainly from Africa and Middle Eastern markets, among others.

“We have relationship managers for our diaspora customers and we are offering them banking and investment services,” said Anastacia Kimtai, the director of retail banking at KCB.