Kenyans abroad sent home a record $641.5 million (Sh64.3 billion) in the first three months of the year, in part reflecting the impact of growing investment products targeting the diaspora.
The inflows in the January-March period represent a jump of 48.29 per cent over the $432.6 million (Sh43.4 billion) captured in the same period last year, fresh data from the Central Bank of Kenya shows.
Diaspora remittances set new records in the four consecutive months with $203.8 million (ShSh20.4 billion) in December, $208.9 million (Sh20.9 billion) in January, $210.4 million (Sh21.1 billion) in February and $222.2 million (Sh22.3 billion) in March.
“The improved performance reflects increased uptake of financial products by the diaspora and new partnerships between commercial banks and international money remittance providers,” CBK says in weekly market note.
Kenyans abroad overtook tea exports and tourism receipts to be become the country’s largest foreign exchange earner three years ago. Financial services firms, particularly commercial banks, have in recent years developed savings and investment products such as mortgages targeted at the diaspora who have historically favoured real estate.
Tier-one lenders such as KCB #ticker:KCB , Equity #ticker:EQTY , Co-op Bank #ticker:COOP and Diamond Trust Bank have been busy inking global partnerships with money remittances firms and opening diaspora windows to tap payments from Kenyans working and living abroad.
The country’s diaspora community has become a major economic player especially in construction sector, despite high transaction charges at nearly 10 per cent of the value being remitted.
“We already offer 360 degree services from buying, building, getting approvals, selling and managing of land to offer value and convenience to our customers,” KCB head of diaspora banking Vincent Aberi said last month when the lender camped in Australia and the United Arab Emirates (UAE).
Increased dollar inflows from citizens in foreign countries partly help ease pressure on the shilling by supporting the supply side of the greenbacks against demand by importers shipping in goods and companies paying expatriates and dividends to foreigners.
“Remittances have played quite a significant part in strengthening of the shilling in 2018 because they are the top foreign exchange earner and cumulatively contributed more than two per cent of Kenya’s real GDP (gross domestic product) in 2017,” Genghis Capital senior research analyst Churchill Ogutu said on Monday.