M-Pesa, the giant mobile money platform by Safaricom, is the most preferred service provider by Kenyans working in the diaspora for sending cash back home.
According to the Report of the Kenya Diaspora Remittances Survey of December 2021, 20% of users said they use the service of the Kenyan telco.
Ahead of M-Pesa was an undisclosed services providers dubbed ‘others’ at 25%.
Sending through banks
Banks followed closely at 16% as the most preferred service provider, followed by WorldRemit at 14%.
The survey ranked Wave at 9%, followed by Western Union and Send Wave at 8%. Asked on the reasons for choosing the service platform, most – at 28% – said they look for convenience and speedy service at 22%.
Other respondents said they chose a service provider based on ease of access at 19%, followed by favourable transaction charges at 12%, and favourable exchange rates. The respondents indicated that funds sent are received in real-time and were usually available on the same day to recipients, thus confirming the efficiency of these channels. “This was the case for 72% of respondents with only a few respondents indicating that it would take up to three days for recipients to access cash sent.”
Challenges faced in sending money
Asked about the main challenges they face in sending remittances to recipients in Kenya, a large proportion cited the cost of remitting as the significant challenge, followed by hidden fees and transfer time. Other challenges cited by respondents include unfavourable exchange rates applied by service providers leading to high conversion costs and limits on amounts that can be remitted through mobile money operators. The survey also listed limited interoperability of mobile money systems and slow interbank transfers as challenges.
Overall, the report said remittance flows to Kenya are regular and remitted monthly, directed at nuclear family members and primarily cater for basic household needs such as food, household goods, medicine and payment of education expenses. The majority of recipients are self-employed, unemployed or students, suggesting a relatively high dependency ratio of Kenyans on the diaspora. Slightly over half of the remittance amounts were allocated to three uses: investment in real estate (land and building) for recipients, mortgage payment for senders, and purchase of food and household goods.
Source: https://www.tuko.co.ke/
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M-Pesa Named Most Popular Service Provider by Kenyans in Diaspora
