Food, medical expenses top use of diaspora dollars
The majority of cash sent home by Kenya’s
diaspora is channeled towards the purchase of food and clearing medical
expenses.
This is according to a new survey by the
Central Bank of Kenya (CBK) which was published on Thursday.
According to the survey which was carried out
between March and May last year involving 1321 respondents, 16 per cent of
respondents indicated monies remitted were used in the purchase of food and
other household goods while another 12 per cent of cited medical expenses.
Other top uses of the diaspora dollars from
the survey are paying for educational expenses at 11 per cent, payment for rent
at household utilities at 10 per cent and ceremony related expenses at seven
per cent.
While food and medical expenses top the use
of the diaspora dollars by frequency, investments in real estate and mortgage
payments top the use of remittances by average amount ahead of the construction
of commercial/residential buildings.
Mobile money operators and money transfer
companies are the most preferred channels of remitting funds ahead of bank
transfers.
Meanwhile, 70 per cent of diaspora
remittances into the country are dispatched using formal channels.
The Kenyan diaspora in Europe, Oceania and
North America send the highest remittances on average compared to inflows from
Asia given their relatively high incomes which average $50,000 (Ksh.5.7
million) per annum.
According to the survey, the Kenyan diaspora,
most of whom reside in the United States, consists mainly of middle aged professionals
with university qualifications and who migrated in search of employment and
education.
The survey which relied on Kenyans remitting
funds into the country in 2019 was aimed at fully capturing remittances data
including informal channels, in-kind remittances and efficiency in the cost of
alternative remittance channels.
While the majority of Kenyans in the diaspora
repatriate cash back home, some opt for in-kind remittances such as electronic
goods, clothing, shoes and medicine.
Last year, Kenyans in the diaspora sent home
a record Ksh.422 billion ($3.718 billion) raising
the inflows by 20.2 per cent from Ksh.351 billion ($3.094 billion) in 2020.
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