From the frying pan to the fire!
Many Kenyan based businesses have cobbled together diaspora versions of their business. They have wrapped themselves in the Kenyan national flag to appeal to the patriotic emotions of the diaspora. Many Diaspora Kenya are pleased with the ability to bank in Kenya and acquire real estate in Kenya.
A few of the banks, brokers and real estate agents have Kenya Diaspora specific products or personnel to support them. The majority of the early adopters of a Diaspora specific desk thought that there was free money and callable owners to take. Most Diaspora desks are worse that a fraud, they do not exist, considering the false prevailing narrative that those in the diaspora are lost and will never come back, most of the diaspora desks are emotional appeals to National emotions without service to back them.
Basics, if you are putting together a product for the diaspora, it may help to know the time difference. You may not want to call or make a customer wake up in the middle of the night to call you! It may also help to understand that a person living in Australia may have a slightly different world view with a person living in the USA, they may have been born in the same village but the environment shapes almost 90% of the human psyche. The word Diaspora assumes that those customers have not assimilated in their adopted countries but are just waiting to go back “home”, that in most cases is a false assumption!
Identification documents. It may help to work from the perspective of the customer not some bureaucrat sitting in Nairobi, most Kenyans living abroad do not run to their chiefs at age eighteen to get national IDS, yer, they don’t! In as much as you want to be overzealous and enforce foreign laws please don’t ask for foreign immigration documentation, even local police in the USA have no authority to ask for immigration status, why does a Kenyan bank need to see and keep a copy of the green-card? Take the identification papers offered, please avoid the need to be an expert on foreign law and “the psychology of the prodigal sons” unless your business involves verifying absentee Kenyan!
Documents of title. It’s common knowledge that the printing mills in River Road will produce any document ranging from hotel receipts, IDS, land title deeds, academic certificates, company searches, KRA PIN certificates, and the list goes on. Please stop asking for bundles of documents which can be manufactured at will, just have one A4 form requesting for the numbers and verify from source. You can actually verify a Kenyan passport from immigration in Nairobi, a KRA PIN from their website, a company registration from the registrar OR you can use the two credit agencies, that is why they exists!
Real Estate Agents. Please stop telling Kenyans abroad to pay for a non partitioned and zoned plots with a promise to ship the title by Courier, you know 80% of the time, you already printed the titles and are hoping the buyers do not have the immigration documents to travel: just saying! There are many good genuine Realtors but they say the truth, like the record keeping in the department of lands is a challenge, like a piece of land may have multiple titles issued at various times and the most persistent holder may prevail even if questions of law arise. One thing genuine kenya realtors don’t do is to promise easy navigation in the title process!
There are some Kenyan banks with bank agents overseas, which in itself is not bad thing , but just how much access do these agents have to their principals? One agent told me that they have no better access than the next guy who walks in the bank or even worse when tacked with the agency label, managers avoid their calls and emails. They are expected to generate deposits but provide or expect no service! The service part is just the tip of the iceberg, in Kenya banking agency rules are very strict, wonder of wonders, so are they in the USA!
Few if, any of the Kenyan banks have taken measures to ensure that their agencies are inline with the local banking laws, should anything go wrong, the local agent and the customer are left high and dry, add this to the non service compact and there is a disaster! Take the state of Delaware, if a foreign bank wants to appoint a bank agent, the bank must file an application with the banking commissioner, provide their annual returns and pay a fee. This applies to most states in the USA and I believe everywhere else in the world. Most Banks with Worldwide Diaspora Agencies have neglected to conform to this requirement, hoping that when they fail in both service and their fiduciary responsibilities they will not be on the hook! The diaspora customers must start to demand the customer service expected of banking institutions in their markets.
The money transfer charges by both Money-gram and western union are the main reason Kenyans in the Diaspora want to open bank accounts with institutions based in Kenya but they may be going from a frying pan into the fire. The last available figure show that the monthly diaspora transfers amount to over one hundred billion a Kenya shillings, that is more than five billion shillings in fees for the institutions involved.
Kenyans are working hard to ensure that they keep most of their hard earned money and that the money transferred goes to productive enterprises of their choice. The entrenched institutions are going to fight tooth and nail to get the status quo but put as many roadblock as possible. This roadblock includes ensuring that any banks within the establishment do not enable any system that lowers the fees.
The roadblocks includes horrible service, gateways that refuse to process mobile payments between retail customers when it’s an established fact that mobile money is the currency of choice in Kenya and limits on amounts in the pretext of know your customer regulations.
The Diaspora Kenyans appreciate the need for KYC rules but do understand that rules can sometimes be used to achieve objectives that are not beneficial to them. It’s a fact that both the Kenyan based business’s and the used based entrenched money transfer businesses take care of number one, they do not take care of the customers, which makes it necessary that regulatory agencies enforce banking regulations including both licensing and KYC.
Crowd-funding is steadily coming under the US Law and we at www.harambee.co are pleased to be starting ensuring that the gateways we partner with apply adaptive payments with parallel payments to ensure that clients funds are not commingled with portal funds. At Harambee.co we ensure that project sponsors get funds at the best exchange possible and that the contributors are either family, friends or supporters with a connection to ensure accountability. Harambee.co has made sure that both resident Kenyans and Diaspora Kenyans can sponsor projects: Diaspora Kenyans, their families , friends and supporters use PayPal while resident Kenyans, their family, friends and their supports use PesaPal through which they access mpesa, airtelmoney, equity, coop bank, visa and MasterCard
By David F Amakobe