Financial literacy for youth in Kenya

Diaspora remittances dropped by Sh5.1 billion in April to $320.3 million (Sh44.1 billion)according to the latest data by the Central Bank.

The drop is a 10.5 percent decrease equivalent to $36.7 million compared to the $357 million (Sh49.1 billion) remitted last month.

“The cumulative inflows for the 12 months to April remittance totaled $ 3,985 million (Sh548.5 billion) compared to $3,968 million (Sh546.2 billion) in a similar period in 2022, an increase of 0.4 percent,” CBK said in its weekly bulletin.

CBK attributes the drop in the amount of money Kenyans abroad send home to inflation even as the Kenyan shilling continues to lose its value against the US dollar last week.

Nevertheless, the US remains the largest source of remittances to Kenya, accounting for 57 percent.

Generally, the amount of money Kenyans living and working abroad have been sending home this year has been on a decline.

In the three months to March, CBK announced that remittances had dropped to $1.016 billion (Sh137.4 billion) from $1.024 billion (Sh138.5 billion) in the same period last year.

The significance of the Kenyan Diaspora to the country’s economy is not often recognized but remittances from Kenyans living abroad make up over 3.4 percent of the Gross Domestic Product (GDP).

Diaspora Remittances in Kenya Funding Basic Needs

Most of the funds sent home by Kenyans living and working abroad are used to fund immediate household needs such as food, medical expenses and school fees, according to a survey; A Diaspora Remittance Mapping in Kenya conducted by Pangea in 2021.

Kenyans Abroad Cut Back to Help Families at Home

In January, a study by World Remit, a digital payments company showed that Kenyans living abroad cut their spending to survive current inflation and still support family back at home.

The survey carried out in June found that 49 percent of respondents said that they ate out less than before, cut back on day-to-day expenses (46 percent) and limited social gatherings (28 percent) to save money.

Diaspora Remittances in Kenya Funding Basic Needs