M-PESA is the Preferred Remittance Channel for Kenyans Living Abroad, Says Latest Central Bank of Kenya Survey

Kenya's mobile money giant, M-PESA, is the most preferred channel for remittances, as 20% of remitters used it to send money back home in 2021. Other than MPESA, popular payment channels include banks, WorldRemit, Wave, Send Wave, and Western Union.

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Kenya’s mobile money giant, M-PESA, is the most preferred channel for remittances, as 20% of remitters used it to send money back home in 2021. Other than MPESA, popular payment channels include banks, WorldRemit, Wave, Send Wave, and Western Union.

In a survey of remitters, the respondents cited:

  • Convenience
  • Promptness
  • Efficiency
  • Speedy service
  • Ease of access
  • Favorable transaction charges

as the main reasons for using these service providers.

Central Bank of Kenya’s Diaspora Remittances Survey also determined that the average cost of sending remittances to Kenya lies between 4% and 6%. Payments from Europe and Asia were found to be more expensive, averaging 6%.

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However, only inflows through formal channels, such as authorized international remittance service providers in Kenya or commercial banks, are included in the reported inflows, which exclude remittances through informal channels and in-kind remittances.

A separate report by the Central Bank revealed that the cost was 7% in 2021 with Kenyans living abroad spending an average of KES 2.4 billion ($21.1 million) per month in costs when sending money home to their relatives.

On average, the cost of sending funds was in the range of 4-5% of the amount remitted while using the most dominant and preferred service providers (mobile money operators, money transfer companies and banks).

The 2021 report also shows those using banks to remit cash paid more compared to the ones utilizing digital channels.

According to Patrick Njoroge, Governor, Central Bank of Kenya (CBK):

“The issue of cost is a big concern, not just for Kenya but around the world, especially those countries in the emerging markets which are recipients of a large amount of remittances.”

– Governor, Central Bank of Kenya

Remittance inflows to Kenya have increased tremendously in recent years, with total remittances in 2021 reaching a record $3.7 billion. This surpassed the previous record of $3.1 billion set in 2020.

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