8 November 2012

Kenya: Eurozone Crisis Eats Into Diaspora Remittances

The Eurozone financial crisis affected diaspora remittances in September which dropped 2.4 per cent to $93.6 million (Sh8 billion) from $94.8 million (8.1 billion) in August, the Central Bank of Kenya said.

However the latest CBK data shows that despite the drop, the September remittances were still an improvement compared to the same period last year.

"The 12-month cumulative average remittance inflow has sustained an upward trend from the second half of 2010, with the average remittances inflow in the year to September 2012 at US$ 93.6 million, up from US$ 68.7 million recorded in the year to September 2011," said CBK in a statement posted on its website.

The amount of money sent home by Kenyans living abroad peaked to a value of $106.4 million in March. Diaspora remittances have been rising a fact that CBK attributed to competition among various money transfer services and partnerships between local mobile money transfer services and other international firms.

Competition among money transfer services, CBK said, had helped to reduce charges hence the sustained growth. The largest mobile money service by customer base and value of transactions, M-Pesa, operated by Safaricom, partners with Western Union to allow transfer of funds from other countries directly into an M-Pesa account.

The service was introduced to ride on the popularity of M-Pesa in the country to make funds transfer easier and more convenient for recipients.

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