Kenyan diaspora residents have either reduced or cut the amounts of money they send back home due to the high cost of remitting funds. This is according to a report released by WorldRemit, a global digital remittance company. According to the report, most immigrants living and working in the diaspora have been forced to limit their financial support to immediate family only, a trend that is likely to continue until the cost of remitting money decreases.
According to the report, 82 percent of respondents agree that the cost of remitting money has increased significantly. Only 45 percent of Kenya's diaspora are sending money to their immediate family only; friends and distant relatives are no longer their priority.
The report also noted that globally, one in nine people rely on money sent from friends and relatives who have migrated abroad for work. The study, which was conducted in October 2022 and surveyed 2,687 respondents, aimed to assess the impact of the increased cost of living on international money senders. The report's findings also highlight the importance of remittances for many families around the world, who rely on the support of friends and relatives abroad to make ends meet. East Africa Regional Manager for WorldRemit Ivan Kanyali commented on the resilience and commitment of migrants to financially support their loved ones overseas, despite the economic challenges they face.
"The inventive solutions, such as side hustles, that we are seeing as a result of the current economic landscape point to the resilience of migrants and their commitment to financially supporting loved ones overseas," he said.
"These findings demonstrate the grit of economic migrants in adapting to wider financial stresses and the rising cost of living while still meeting the needs of their families at home and abroad," he added.
In addition to the negative impact on Kenyan diaspora residents' ability to support their loved ones, the high cost of remitting money has also led to a trend of taking on side hustles in order to support an increased cost of living.
This was reported by a significant percentage of respondents in the US, UK, and Australia, with 89% of those with a side hustle indicating that they would continue to maintain it in the coming year.
According to Franck Tiambo, Co-founder KimboCare, a digital health platform allowing individuals to purchase traceable health services helping millions access care services back in selected African countries, the impact will be huge on families back home relying on these remittances if the situation does not improve.
"This will definitely create a need and an opportunity for better structures for the funds remitted. Having said that, it is an opportunity for migrants to explore inventive ways to make more efficient use of their hard-earned money. A more structured approach for diaspora funds may be explored to democratize access to good education, and quality healthcare for low-income earners who are dependent on these funds," he said.
The report also found that many respondents were cutting back on discretionary spending to save money, with 26 percent reporting that they were curtailing entertainment expenses such as dining out or going to the cinema.
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