Equity Bank Group #ticker:EQTY says its share of Diaspora cash grew nearly two-fold in 2018, largely riding on strategic partnerships with global electronic money transfer platforms.
Equity, whose shares are publicly-traded on the Nairobi bourse, handled Sh107 billion in the 12-month period through last December, a 197.22 percent jump from Sh36 billion in 2017.
Diaspora banking earned the lender Sh751 million in commissions charged for facilitating cash transfers from abroad, a 169.17 percent surge from Sh279 million a year earlier.
That means Equity earned a fee of Sh7 million, or 0.70 percent, for every Sh1 billion diaspora cash transfer it processed, slightly reduced from Sh7.8 million, or 0.78 percent of the value, in 2017.
The disclosure implies that 39.34 percent of the cash sent home by Kenyan living and working abroad for family support, payments and investments passed through the bank.
“Equity continues to invest in solutions through innovations and strategic partnerships with global money remittance outlets targeting Kenyans living and working abroad,” the bank said in a statement.
Diaspora remittances last year grew 38.59 percent to Sh272 billion ($2.70 billion) from Sh196.33 billion ($1.95 billion) in 2017, consolidating the position of Kenyans abroad as the country’s top foreign exchange source.
The cash has occupied the top spot since 2015 having leapfrogged tourism receipts (Sh157.36 billion in 2018), horticultural exports earnings (Sh153.68 billion) and tea (Sh140.86 billion), Central Bank of Kenya data shows.
Diaspora inflows are, however, estimated to be much higher than the Central Bank statistics, which are based on what is remitted through official channels.
These are largely commercial banks and other authorised international remittances service providers such as Western Union and MoneyGram.
“The entry into the market of products like SendWave, WorldRemit, Kenya's own SimbaPay, GeoPesa and Tangaza have gone some way to lower remittance costs over the past eight years from about 15 percent to now 3-7 percent,” Kenya Diaspora Alliance (KDA) chairman Shem Ochuodho said in a past interview.