Credit Bank bets on Saccos to drive diaspora remittances

"What we now need is to channel this crucial lifeline to our rural communities to facilitate the productive process that will boost the economy at large," she said.

Other partners include the Kenya Diaspora Alliance and Nyumba Mkononi and the programme will work with community networks and Saccos to reach Kenyans living in rural areas.

Interswitch East Africa Limited 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 new program co-funded by the European Union and IFAD (International Fund for Agricultural Development) will be underpinned by digital money transfer solutions to ensure affordability and seamless remittances to the last mile.

According to the latest data from the Central Bank of Kenya, remittances to the country in the first three months of 2023 stood at Sh133billion, a marginal drop from a similar period last year.

Credit Bank says 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.

"The cost of remittances to, from and across Africa remains high compared to other regions of the world," said Ms Korir.

"We need uniquely tailored solutions that encourage Kenyans across the world to send money home while ensuring the largest possible portion of this money gets to rural recipients," she said.

Ms Korir said the partnership will cut down the number of intermediaries to facilitate transfers directly to the last mile.

"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," she 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. Out of this, the program aims to assist 400 Sacco members to increase their savings by at least 10 per cent.