Wednesday, May 25, 2022

Digital solutions will unlock the full value of diaspora remittances

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The fusion of finance and digital technology has powered one of the most exciting and rapid phases of development in Kenya and the world. Cross-border money transfer is now easier, safer, and more reliable for the three million Kenyans living in the diaspora1.

Money sent back home to friends and family by Kenyans living abroad – also known as remittances – is one of the main sources of forex for Kenya1. Data from the Central Bank of Kenya (CBK) shows that in the nine months leading to September 20212, remittances stood at USD $2.71 billion (Sh301 billion), up 20% from $2.27 billion (Sh252.5 billion) in the corresponding nine month period leading to September 2020.

Traditional remittance services, which have long been the only option available to Kenyans abroad, rely on a physical agent network, which requires agents on both sides of the transaction. That means people sending and receiving remittances must do so during the official banking hours at a branch, making the process inconvenient and costly. The heavy reliance on paperwork and a high minimum amount per transaction, sometimes as high as $100 (approximately Sh10,000), often means senders often need to save money for some time before remitting. It also doesn’t help that transfers are not instantaneous, making it harder for diaspora Kenyans to respond to emergencies back home.

In today’s digital era, sending money back home should be simple, affordable, and as quick as sending a text message. That’s why leading global payments company, WorldRemit, challenged incumbents in the remittance industry by offering a 100% digital solution on the send side.

WorldRemit currently sends from 50 countries to recipients in 130 countries, including Kenya. One of the defining attributes of its service is convenience. For those receiving money, the company offers a wide range of options, including bank deposit, cash collection, mobile airtime top-up and mobile money.

Renowned for its affordability and safety features, WorldRemit gives customers more value for their money. In 2020, the company set new prices for international transfers in over 450 of its largest corridors in Africa, allowing customers to send more to family and friends via the WorldRemit mobile app and website. The company has also focused on optimising its safety features to enable swift and secure transfers.

As more migrants look for convenient, safe and affordable channels to send money back home, digital services like WorldRemit that offer this kind of experience are likely to continue growing in popularity. The use of digital channels holds the key to unlocking the full potential of diaspora remittances, which already play an important role in supporting thousands of households and strengthening the broader Kenyan economy.        

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