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The amount of money Kenyans living abroad send home is probably going to increase due to the free-falling shilling's value against the US dollar.
This is based on the first-ever Global Money Transfer Index from Western Union. It claims that a growing number of Kenyans in the diaspora are paying close attention to how their local currency is performing at home and trying to take advantage of any opportunities that may arise.
The index reveals that 67% of Africans abroad send more money when the value of the local currency declines, and 65% of recipients agree that when local currency values decline, they receive more money.
In February of this year, when the shilling averaged Sh126, Kenyans living abroad sent Sh39.3 billion ($309) home, according to an analysis of CBK data on remittances, compared to Sh36.7 billion ($321.5 million) during the same period last year, when the shilling averaged Sh114.
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While the amount transferred in dollars slightly decreased during the period, the value in local currency increased by Sh2.6 billion.
More than seven in ten Africans who receive remittances (78%) say they anticipate an increase in remittances this year, according to the survey, which also reveals that most Kenyans and Africans in general share this optimism. Economic hardships like the 81 percent higher global cost of living for recipients on the African continent are prompting more people back home to request larger donations.
Consumers claim that while family support is the primary motivation for sending money, transfers also play a significant role in long-term financial planning.
The second-highest reason for remittances, behind supporting business interests at home and saving for the future, is the cost of education.
“As consumers tell us that the remittances they receive will need to increase, it is imperative for money transfer providers to stay agile, and support consumers on their journey,” said Western Union Head of Africa Mohamed Touhami el Ouazzani.