Kenyan companies are rushing to tap the huge financial opportunities in the diaspora as remittances continue to rise sharply.
KCB, CIC Insurance, and Nation Media Group, are some of the players in the insurance, banking and money transfer business which have joined Safaricom, Chase, Co-op, Equity and Gulf African Bank to take their services and products to Kenyans living abroad.
Remittances from the diaspora stood at Sh74.8 billion last year, rising 55.3 per cent from Sh48.1 billion in 2007, with most of the money going into investments and support of dependants.
Players say they are offering greater convenience in money transfers and more reliable financial services to the diaspora which has suffered major losses from fraud by relatives and friends.
“There is a huge opportunity in the diaspora market,” said Nelson Kuria, the chief executive of CIC Insurance.
“The remittances we see today can rise further if Kenyans in the diaspora can find reliable means of investing their money. Many complain of being ripped off by relatives,” he said.
CIC, which plans to put up property on its 200-acre land in Kiambu, says Kenyans in the diaspora have expressed interest in 300 houses.
Property is the most preferred investment class by Kenyans abroad who seek to profit from rents or capital gains, with some also buying or building homes to live on return home.
Returns from Kenya’s property market are stable and have beaten those in the volatile equities and bonds in the past decade, largely due to increased demand amid inadequate supply of residential and office blocks.
Kenyans have relied heavily on friends and relatives to buy or build houses, exposing them to major financial losses after the money is diverted for other uses.
Mr Kuria says CIC is offering insurance covers to businesses and relatives of Kenyans abroad for whom it is also identifying investment opportunities.
KCB, the largest player in the mortgage market, is keen on tapping the diaspora market, riding on its consumer and corporate banking divisions.
In a recent exhibition in London during the Olympic Games, KCB opened 300 accounts for Kenyans living in the UK with a total balance of Sh3 million.
Northern America accounts for about 45 per cent of total remittances, followed by Europe (30 per cent), with the rest coming mainly from Africa and Middle Eastern markets, among others.
“We have relationship managers for our diaspora customers and we are offering them banking and investment services,” said Anastacia Kimtai, the director of retail banking at KCB.
In property investments, for instance, the bank is working with other partners like developers and constructors to enable its clients to buy or build property.
KCB joins Co-op Bank, Equity, Chase, and Gulf African Bank in the race to acquire high net worth clients who are critical in boosting deposits, loans uptake, and non-interest income from their transactions.
Co-op Bank, for instance, has a fully fledged department that manages wealth for Kenyans in the diaspora for a fee.
Equity signed a deal with mobile phone firm Essar allowing its account holders to receive international remittances through the yuCash transfer system.
Aside from property, the banks are helping Kenyans to make investments in bonds and equities and other business classes.
Bankers say the diaspora market offers an opportunity to sell multiple products, with the most diversified institutions standing to benefit the most.
KCB and Co-op, for instance, offer retail banking, mortgages, and investment or wealth management services.
The multi-billion-shilling remittances have also attracted Nation Media Group which has introduced an international money transfer service called NationHela.
“NationHela offers our readers in the diaspora the convenience of being able to send money back home at the click of a button while they are catching up with their news online,” said NMG’s chief executive officer Linus Gitahi.
The service, backed by Diamond Trust Bank, allows customers to send money online to their relatives in Kenya who will receive it in their virtual mobile account.
Western Union, Ecobank, MoneyGram, and Safaricom –through M-Pesa— are other players in the international money transfer market.
Source: Business Daily Africa
