Kenyans living in the diaspora have sent home Sh185.98 billion in the first four months of the year, according to the latest data from the Central Bank of Kenya (CBK).

The Drop in Remittance

This represents a 3% drop compared to Sh 191.92 billion recorded in January to April 2022, attributable to the rising cost of living in many countries.

The remittances fell for the first time since 2010 as inflation rose steeply, squeezing disposable incomes for Kenyans living and working abroad. 

The United States and Europe in particular, are facing higher energy, food and rent prices forcing Kenyans living abroad to seek side hustles in a bid to add to their income and subsequently help their counterparts at home. 

However, CBK says despite the drop, the inflows remain supportive of the external balance of payments and foreign exchange. The cumulative inflows for the 12 months to April remittance totaled $ 3,985 million (Sh548.5 billion) compared to $3,968 million (Sh546.2 billion) in a similar period in 2022, an increase of 0.4 percent.

North America remains dominant in the amount of money sent by Kenyans, followed by Europe and the rest of the world. In the month of April, the US remained the largest source of remittances to Kenya, accounting for 57%.

Education, healthcare and household needs remain the main uses of remittances in Kenya.

Moving forward, affordable channels of sending money home will be a key factor in increasing inflows into the country. The East African region is still above the global average transfer value, which is currently at 6.5%. 

In contrast to the global average of 6.5%, the average cost of sending remittances to the Regional African bloc, Inter-Governmental Authority for Development (IGAD) is 8.9%, which is approximately three times the Sustainable Development Goals target rate of below 3%. 

How Grey is Helping

Grey has entered the Kenyan market to solve this problem. 

Founded in 2021, Grey, a Y-combinator-backed fintech startup, offers an international money transfer service that enables its users to send and receive international payments quickly and without restrictions.

It enables its customers to have virtual international bank accounts and cards for free and enjoy a seamless foreign payment process.

Users can create a foreign USD, GBP, and EURO bank account for free, send money to the UK and Europe, and receive payments from over 88 countries at affordable and competitive prices. 

Kenya’s diaspora remittances have continued to be the biggest source of foreign currency flows and support many livelihoods.