Lower bank fees on diaspora remittances – Business Daily
The drop in diaspora remittances means that thousands of Kenyans who rely on financial support from relatives in the US are facing hard times.
Diaspora remittances from the US fell by a monthly average of three percent this year. A Central Bank of Kenya (CBK) breakdown of remittances by source country shows that inflows from the US fell to $183.4 million (Sh21.9 billion) from $221.5 million (Sh26.5 billion) in December 2021.
To cushion people in the diaspora, who are also struggling with a 40-year jump in inflation, Kenya should lower the cost of sending the money back home.
To send money to Kenya using an international money transfer provider, the fees range from $6 (Sh719) to $39.75 (Sh4,764), but traditional banks may charge more.
Last year, the CBK said the cost of remittances to Kenya is averaging about seven percent, which is slightly below the average of eight percent for sub-Saharan Africa but well above the ideal target of three percent.
The high cost of living means that families with relatives abroad require even more money because prices of food and fuel have gone up.
The CBK survey on diaspora remittance also lists real estate investment as a major use of the remittance flow, meaning that the projects might stall.
The issue of cost is a big concern and it is time to bring it down because diaspora remittances are now Kenya’s largest source of foreign exchange ahead of horticulture, tea and tourism earnings.