Remittances from Kenyans abroad rose sharply by 71.12 per cent in February attributed to improved efforts by banks, money transfer providers and government to net the cash through formal channels.
Central Bank statistics show foreign exchange inflow increased from $60.7 million(Sh5.04 billion) sent in February 2011 to an all time high of $104 million(Sh8.63 billion) this year maintaining position as one of the top foreign exchange earners.
The remittances was also 15.84 per cent higher than the $89.7 million(Sh7.44 billion) recorded in January. "The increased remittances are attributed to among others, aggressive outreach to the diaspora to invest in Government's Savings Development and Infrastructure bonds through these formal channels," said Charles Gitari Koori, Director Research Department on the CBK website. For instance, CBK last year sold the first 12-year infrastructure bond which was mainly targeted at the Kenyans in diaspora.
Other efforts have been going towards encouraging those abroad to put money in investments such as at the NSE, real estate, life insurance rather than sending money home for consumption. Koori said the increase in remittances could be due to increased competition among money transfer service providers that reduced transaction charges.
Last year, popular local mobile money services provider, M-pesa, partnered with Western Union which has a global reach in a bid to tap the diaspora cash. Other players include MoneyGram, Worldremit and Visa which is set to launch its money transfer services this year.
The main sources of the cash remain North America and Europe. Remittances from North America increased by 18.2 per cent from $44.02 million(Sh3.65 billion) in January to $52.02 million(Sh4.32 billion) in February accounting for 50 percent of total remittances. Over the same period, remittance inflows from Europe increased by 20 percent from $24.39 million (Sh2.02 billion) to $29.27 million(Sh2.43 billion)