Diaspora remittances drops by Sh400m

Kenya: The amount of money sent by Kenyans living abroad dropped slightly to Sh10 billion in June, from Sh10.4 billion in May. The Central Bank of Kenya (CBK) attributed the four per cent drop to a decline in inflows from North America and Europe. This is the second month this year that the remittances inflows have dropped, the first being in April.

The June records, however, shows an improvement compared to the Sh6 billion diaspora inflows to Kenya in same period last year. CBK conducts a monthly survey on remittance inflows through the formal channels that include commercial banks and other authorised international remittance service providers in Kenya.

According to CBK, the on-year to year basis remittances remained resilient in the 12 months to June 2014, with the cumulative inflows having posted an increase of 13.22 per cent to Sh121.8 billion ($1.4 billion) from Sh104.4 billion ($1.2 billion) in the year to June 2013.

The 12 month average flow during the same period sustained an upward trend to peak at Sh9.8 billion ($113.1million from an average of Sh8.6 billion ($99.9 million). The inflows are, however, likely to rise significantly, following the licensing of seven more money remittance providers by CBK in the last one year, following the enactment of the Money Remittance Regulations Bill 2013.

These regulations allow for stand-alone operators who can conduct money transfer services without the need for a commercial bank as has been the practice. CBK Governor Njuguna Ndung’u said on Thursday that the Diaspora inflows are expected to grow significantly due to new partnerships between local financial institutions and international money transfer operators, the latest being the one between Postbank and RIA Money Transfer.

Going by source market, North America continues to dominate remittance inflows - accounting for 45.5 per cent of total inflows (Sh4.5 billion or $52.83 million) in June. Inflows from Europe accounted for 27.7 per cent and amounted to Sh2.8 billion ($32.15 million). Inflows from the rest of the world amounted to Sh2.6 billion ($31.08 million), accounting for 26.8 per cent of total inflows.