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.