Saturday, September 22, 2012

Tech Scene Kenya: Banks and Money Transfer Market in Kenya

In the last few weeks if NOT months we have seen the entry of two institutions into money transfer/remittances market. One is the entry of an unusual suspect Nation Media Group though Diamond Band [with Nation Hela]
This has been followed heads over heels by Barclays Bank [with PingIt].
Ping IT allows free mobile money transfer from the UK.
Diaspora Remittances
These institutions are entering into this market so as to have a share of the cake of the remittances to Kenya by Kenyan’s living in the Diaspora. The Central Bank figures on remittances to Kenya for year 2011 stand at a whopping $ 891,129
If the global economic recovery is to happen currently there are dark clouds hanging in Europe over the split of the Euro as a result of the Greek crisis which could be followed by either Spain or Italy. However, the United States seems to be out of the financial woods then remittances are bound to increase in the coming years and go to the pre-2007 years.
A substantial number of Kenyan’s live in abroad in Europe and United States. Most Kenyan’s go abroad in search of higher education but end up settling there after graduation. Since our society is knitted for children after graduation to support their parents then money is bound to flow North-South.
Industries benefitting from Diaspora Cash
Apart from the normal family support given from overseas to parents by siblings living there, other industries have received a boom from these remittances.
Pioneers to this market were Mama Mikes which was set up by Segeni in 2001. Segeni had lived abroad for a few years thus knew the problems they faced in remitting monies to Kenya. Mama Mikes deals with gift vouchers.
Other pioneer is pesapal /ticketsasa
The construction industry has also benefited substantially. Currently Nairobi is experiencing a housing/residential boom if the housing billboards on highways and housing exhibition are anything to go by. Kenyan’s abroad have been keen on building houses for their folks and houses in which they can retire to.  

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