(Bloomberg) — Kenya’s remittances, the East African nation’s largest source of foreign exchange, is expected to grow by at least a fifth this year, according to money transfer company WorldRemit Ltd.
Kenyans abroad sent home a record $3.72 billion last year, 20% more than the previous year. Remittances in the first quarter of 2022 are already about a quarter higher than a year earlier, according to Central Bank of Kenya data.
“There’s definitely going to be some strong inflows,” Sharon Kinyanjui, WorldRemit’s director for Europe, Middle East and Africa, Receive Markets, said in an interview. “The only caveat is, obviously from a global standpoint, there’s inflation that is happening and there are also some key political risks that are at play.”
Founded in 2010, London-based WorldRemit enables customers to send money to more than 100 countries from mobile-money wallets and bank accounts in either local currency or even dollars in some countries.
New technology such as blockchain and increased competition from venture capital-backed companies will ultimately lower the cost of sending remittances to about 6% from 16%, she said.
The depreciation of Kenya’s shilling against the dollar is expected to continue, Kinyanjui said. The currency of East Africa’s largest economy has fallen about 2.7% year-to-date to a record 116.52 shillings.
“We’re seeing a weakening of currencies across different markets so looking at the numbers alone, it might be 118 shillings” to the dollar, she said. “It’s not just Kenya alone, but what is a bit more particular to Kenya is heightened political risk as this is an election year.”
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