Sending Money Home

Sending money to Kenya is an issue that resonates across all Kenyans in the Diaspora. Over the years, the amount of remittance to Kenya has increased with the increase of Kenyans emigrating to foreign lands. According to official statistics by the Central Bank of Kenya, a total of $574 million was sent home in 2007. This number represents a 40% increase over the previous year whereby Kenyans sent $408 million. These conservative amounts represent close to 2% of the country's GDP as they do not account for the various ways that Kenyans remit money. Unofficial estimates from Inter-American Dialogue show that the amount sent could be close to $1 billion with each immigrant remitting at least $1,500 in 2006.

Personally, I have only sent money home once through official channels. Faced with a medical emergency then, I turned to the the services of Money Gram to send money to a relative. That is not to say that I have never sent money to Kenya. Like many other immigrants, I have always used unofficial channels.

My preferred way of sending money is usually through friends or relatives travelling to Kenya. Hardly does 3 months go by before a trusted kin or kith makes the journey to Kenya. While this is a risky and unreliable way to transfer money, I have continually used it successfully for the period of time that I have lived abroad. Doing so enables me to avoid transfer fees and get the best available exchange rate in Nairobi.

Once in a while I have turned to battering to send money home. In these instances, I usually get requests from friends in Kenya to buy them goods over here. Normally, I ask them to give the cash to someone in Nairobi then I send them their goods. This has worked well because, these people are in need of something and we both benefit from using the quoted exchange rate in the daily newspapers which is usually, better than what it would cost them if they wired me their money.

Closer to when we travel to home, I sometimes borrow locally from friends in Kenya whom I pay off later when I get to Kenya. The downside to this is you need to have good friends who don't mind helping out. On rare occasions I have turned to my folks though I try as much as possible to keep them out of my financial dealings.

Another means of money transfer that is fast gaining ground is the use of debit cards. Usually, a Diasporian will open up a debit account and send the ATM card to Kenya. When the recipient requires money, the sender deposits the money into the checking account which can be withdrawn in Kenya. I believe this is the best option especially now that foreign transaction fees and commissions are being phased out. What's more the recipient only needs an ATM to withdraw the money which can be accessed outside working hours. While I have given one of my siblings in Nairobi a Paypal debit card, I have never used this mode of transfer. From what I've heard, Bank Of America has a banking relationship with Barclay's Bank of Kenya and therefore they are the best suited for such no fee transactions.

Of all the ways to send money, I would discourage anyone from sending a check. A check takes days if not weeks to clear and there is usually a hefty check processing fee charged by the receiving bank. I tried to pay someone once through a check and they refused to cash the check even though I had factored the processing fee. Because the transactions involved funds from a third country, I was forced to delay the payment until when I travelled to Kenya on vacation. In return for the wait, they got a favorable exchange rate as I was paying them in foreign currency. Looking back, I think that was a foolish move because I landed in Nairobi at night and made the trip home from the airport close to midnight. In my pockets I had stashed wads of money which I could have lost had we been carjacked during the height of insecurity in Nairobi.

As globalization takes foot, I expect it is going to get cheaper to remit money home. Advances in technology and increased ease of international travel will open up more competing channels for Kenyans in the diaspora.