NAIROBI, Kenya, Oct 19 – About 2.6 million Kenyans or 14 percent of the adult population regularly receive an average of Sh60,000 a year from their relatives residing abroad.
A new survey by the World Bank indicates that the money is remitted in seven transactions in a year through banks and other money transfer companies such as Moneygram and Western Union although about some of it is sent through informal channels.
"The adult population according to the 2009 census is 18.6million. The World Bank estimates that 2.6million Kenyans receive an average of $105 (Sh8,490) at least seven times a year, giving a total estimate of $1.9 billion (Sh153.3 billion)," explained the consultant Sergio Bendixen.
The study involved 2,423 recipients, 35 percent of whom said they received money from their relatives in USA; 25 percent from Europe, 12 percent from Asia and the Middle East and the remainder from Africa.
The lowering of communication costs in the country which makes it easier for Kenyans to communicate with those in the Diaspora has played a major role in facilitating the remittance process, the study further discovered.
According to the findings, the inflows benefit an average of four other family members or relatives while an estimated 20 to 30 percent is invested either in small businesses, education or saved with the various financial institutions.
Central Bank of Kenya data shows that last year, Diaspora flows stood at Sh49.1 billion, although the actual size is estimated to be 20 percent more, an amount which World Bank\’s Specialist for Africa Region Payment Systems Benjamin Musuku said calls for the development of supportive frameworks that can encourage Kenyans abroad to send more money back home.
Despite the fact that the world economy has been in a recession for nearly two years, Diaspora inflows to sub-Saharan Africa are estimated to exceed Sh1.7trillion ($21 billion) and are projected to grow by two percent this year.
But while remittances play a crucial role in Kenya\’s economy and even outstrip what the country receives from the International Monetary Fund to help it meet its trade deficit, the government is yet to take adequate measures to maximise the flow\’s potential.
A one-day conference jointly organised by the World Bank and the Central Bank of Kenya and anchored around the results however hoped to discuss the obstacles to leveraging the inflows and how they can be used effectively to improve the country\’s developmental impact.
How to lower the costs of transmitting the money to enable more Kenyans to remit more will also be on the agenda of the consultative forum through which Mr Musuku was optimistic workable and innovative solutions would be reached.
"Kenya has not shied away from thinking outside the box and has been innovative in its approach with products such as M-PESA (Safaricom\’s money transfer service) and M-Kesho (Equity Bank\’s revolutionary bank account)," he observed.
The government has in the past indicated its intentions to provide incentives to Kenyans residing abroad estimated to be two million pointing to their ability to play a major role in enabling the country increase its national savings levels from the current 17 percent to 30 percent as envisaged in the Vision 2030.
However, it is yet to finalise a Diaspora Policy which incorporates the Diaspora Bond which would enable it to mobilise funds from such Kenyans for various development programs in the country.