A woman collects US dollar bills at a money-changer’s stall. Diaspora remittances from Kenyans living abroad is up 36 per cent in the 9 months ended September 2012 compared to the same period last year. File
Diaspora remittances from Kenyans living abroad is up 36 per cent in the 9 months ended September 2012 compared to the same period last year.
The inflows rose from Sh54.7 billion ($643,772m) to Sh74.4 billion ($876,306m) on what central bank attributed to reduced remittance costs and better data collection methods.
“The factors explaining the relative increase in remittances include: Improved data collection techniques due to proper classification of remittances data by commercial banks,” said central bank.
The World Bank says transactions costs amount to an average of up to 10 per cent of the total money sent at any point.
However, remittances dipped 2.4 per cent month on month from August's Sh8.058 billion ($94.8m) to Sh7.86 billion ($92.5m) in September due to a marginal reduction in inflows from the European region, the central bank said.
Kenyans abroad have been sending money to help their relatives at home, invest in real estate projects among others investments.
More recently, the central bank said Kenyans living abroad have also started investing in government securities targeted at them, such as infrastructure bonds and the savings bonds.
The central bank also said that mobile phone companies’ partnership with international money transfer players such as Western Union has made it cheaper and more convenient to send money back home.
“We expect that remittances will continue to rise as the US economy continues to get out of the 2008 recession because the largest percentage of remittances comes from the US,” said Fred Mueni the managing director of Tsavo Securities.
The World Bank last year launched a data base showing the prices of sending money using various service providers that resulted in slight price cuts.
Data from World Bank shows that 54 per cent of the diaspora remittances are sent mainly via electronic funds transfer followed by checks, account to account, bank drafts, and mobile money.
Remittances are a major source of foreign exchange for Kenya alongside tea, horticulture and tourism. The Remittances hit a record Sh75.7 billion ($891.1m) in 2011.
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