NAIROBI, Kenya, April 25 – Credit Bank has unveiled a joint partnership to tap into the country’s multi-billion-shilling diaspora market by developing customized money transfer solutions to ease remittance flows through saccos.
The Affordable Remittances and Enhanced Financial Inclusion Program has been co-funded by the European Union and the International Fund for Agricultural Development (IFAD) at a cost of 50 million euros (Sh7.4billion).
Other partners include the Kenya Diaspora Alliance, Interswitch East Africa, and Nyumba Mkononi, they will work with community networks and saccos to reach Kenyans living in rural areas.
Credit Bank CEO Betty Korir noted that this new program aims to lower the number of intermediaries in sending remittances, increase financial inclusion, and reduce remittance costs.
“Diaspora remittances have an integral role in emerging economies like Kenya and with an estimated USD4 billion sent back home each year, what we now need is to maximize the ways in which these inflows can be beneficial to rural communities and the economy at large,” she said.
Korir noted that through the partnership they aim to reduce the cost of sending remittances from the current 9 per cent of the full amount to 2 per cent.
Interswitch East Africa Country General Manager Romana Rajput said working with saccos and their members will make transfers quicker and more convenient to beneficiaries.
“Saccos form an important part of our financial services in Kenya where we come together to save money and improve the quality of our lives through lower interest rates loans to acquire important purchases like land, homes, educate our children, improve our businesses and much more,” said Rajput.
The Credit Bank CEO said the project will leverage on its network and resources to enhance financial resilience and economic empowerment of Kenyan remittance senders and rural recipients back home.
“We believe that we can take advantage of our wide Sacco networks within our rural communities to make remittances more accessible at the least cost,” Korir said.
Participating SACCOs will also have their members and staff trained as sub-agents for rural areas.
This will involve capacity-building sessions to strengthen their legacy financial platforms and bring them at par with leading service providers.
Kenyans sending funds from Germany for example through Ria-Credit Bank digital platforms will pay just 3 per cent of the sent amount.
The program aims to benefit 1,200 Kenyans in the diaspora and facilitate at least 1,500 recipients back home to open a bank account for the first time.
The program is also focused on deepening financial inclusion for rural remittances recipients through SACCO accounts with over 1,200 SACCO members receiving remittances directly through Credit Bank–Ria platforms and another 1,350 SACCO members receiving financial literacy training.
According to the latest data from the Central Bank of Kenya, the cumulative remittance inflows for the 12 months to March 2023 totaled USD 4,020 million compared to USD 3,912 million in a similar period in 2022.
Remittances not only represent an important source of forex but also support many livelihoods.
