Despite limitations on interoperability and permitted amounts, mobile money platforms remain the most cost effective and most popular channel for remittances into Kenya, according to a new survey released by the Central Bank of Kenya.

The Kenya Diaspora Remittances Survey December 2021 shows that remittance receipts through formal channels surged to US$3.7-billion during the year, compared to US$3-billion in 2021. Remittances account for about 3% of Kenya’s GDP, reinforcing the market’s credential as a major source of foreign currency for the East African country.

Mobile money platforms such as M-Pesa, are considered among the most popular channels, according to the report.

It also shows that remittances through mobile wallets accounted for about 32% of all remittance receipts, followed by banks, money transfer agencies and other channels such as courier and postal companies.

The report reads, “(The) majority of the respondents used mobile money operators, money transfer companies and banks. Mobile money operators are the most frequently used service providers.”

Other popular channels include banks as well as money transfer agencies such as WorldRemit, Wave, Sendwave, and Western Union, with respondents citing “convenience, prompt/efficient/ speedy service, ease of access and favourable transaction charges as the main reasons” for using these service providers.

On average, the cost of remitting funds back to Kenya ranged from 4% to 5% of the amount remitted using the most dominant and preferred service providers such as mobile money operators, money transfer companies and banks.

Respondents to the survey also cited “slow interbank transfers” arising out of the banking remittance channel.