Kenyan lender Credit Bank has partnered with financial service providers Interswitch and Ria Money Transfer to provide diaspora cash remittance services to rural recipients through Saccos.
Dubbed the Affordable Remittances and Enhanced Financial Inclusion Programme, the initiative has on-boarded three saccos that will be engaged in the next 16 months, with an eye on another seven in the next 36 months.
The saccos will have their staff appointed as sub-agents in the rural areas which are underserved by formal remittance providers.
The lender said on Tuesday that it is aiming to reach at least 1,200 Kenyans living in the diaspora and facilitate at least 1,500 rural recipients back home to open a bank account for the first time.
The programme, which is co-funded by the European Union and the International Fund for Agricultural Development, will also see the partners train 1,350 Sacco members.
“The cost of remittances to, from and across Africa remains high compared to other regions of the world,” said Credit Bank CEO Betty Korir.
“We need uniquely tailored solutions that encourage Kenyans across the world to send money home while ensuring the largest possible portion of this money gets to rural recipients.”
Interswitch country general manager Romana Rajput said working with Saccos will make cash transfers quicker.
Diaspora remittances have grown in recent years to become Kenya’s biggest source of foreign exchange, largely driven by a growing number of Kenyan immigrants to Western economies such as the US, UK and Canada, and also a growing Kenyan migrant labour force in the Middle East.
The latest Central Bank of Kenya (CBK) data shows that cumulative inflows for the 12 months to March 2023 totalled $4.02 billion (Sh544.6 billion), up 2.8 percent from $3.91 billion (Sh529.1 billion) in the corresponding period in 2022.
A survey carried out by the CBK in 2021 revealed that the money sent home was mainly used for purchasing food and household goods, to offset medical expenses, to meet education expenses, payment of rent, household utilities and farming needs.
