Credit Bank, a Kenyan financial institution, has announced a collaborative partnership aimed at tapping into the country's multi-billion-shilling diaspora market to enhance its product offerings in a highly competitive industry.

The initiative, known as the Affordable Remittances and Enhanced Financial Inclusion Program, brings together various financial service providers, including Interswitch and Ria Money Transfer, to create tailor-made money transfer solutions.

Credit Bank CEO, Betty Korir, noted that diaspora remittances play a vital role in emerging economies such as Kenya.

With an estimated $4 billion sent back home annually, they provide a crucial source of foreign exchange and capital inflows into the country.

The primary objective of the program is to direct this essential lifeline to rural communities to facilitate productive processes that will boost the economy at large.

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“Diaspora remittances have an integral role in emerging economies like Kenya and with an estimated $4 billion sent back home each year, they present a crucial source for foreign exchange and capital flows into the Country,” Korir said. 

"What we now need is to channel this crucial lifeline to our rural communities to facilitate the productive process that will boost the economy at large."

Other partners in the program include the Kenya Diaspora Alliance and Nyumba Mkononi, and it will work with community networks and Saccos to reach Kenyans living in rural areas.

According to Interswitch East Africa Limited Country General Manager Romana Rajput, the use of Saccos, in particular, will make transfers quicker and more convenient for beneficiaries.

He further stated Saccos form an essential part of Kenya's financial services, where people come together to save money and improve their lives through lower interest rates and loans to acquire important purchases like land, homes, and education.

“Saccos form an important part of our financial services in Kenya where we come together to save money and improve the quality of our lives through lower interest rates, loans to acquire important purchases like land, homes, educate our children, improve our businesses and much more,” Rajput said.


 Alexandre Baron - Head of Governance and Macro Economics for EU delegation in Kenya and Ms Betty Kori - Cheif Executive Officer Credit Bank during the launch 

Credit Bank's network and resources will enhance the financial resilience and economic empowerment of Kenyan remittance senders and rural recipients.

According to the latest data from the Central Bank of Kenya, remittances to the country in the first three months of 2023 stood at Sh133billion, a marginal drop from a similar period last year. 

“The cost of remittances to, from and across Africa remains high compared to other regions of the world,” Korir said. 

"We need uniquely tailored solutions that encourage Kenyans across the world to send money home while ensuring the largest possible portion of this money gets to rural recipients."

Korir added that the project would reduce the number of intermediaries involved in transfers, ensuring that funds get directly to the last mile.

“We believe that we can take advantage of our wide SACCO networks within our rural communities to make remittances more accessible at the least cost,” she said. 

The program aims to benefit 1,200 Kenyans in the diaspora and facilitate at least 1,500 recipients back home to open a bank account for the first time.

Additionally, participating Saccos will have their members and staff trained as sub-agents for rural areas to strengthen their legacy financial platforms and bring them at par with leading service providers.

Kenyans sending funds from Germany, for example, through Ria-Credit Bank digital platforms, will pay just 3 per cent of the sent amount. 

Overall, the program seeks to deepen financial inclusion for rural remittance recipients through Sacco accounts.

The initiative will involve capacity building sessions to enhance financial literacy, with over 1,200 SACCO members receiving remittances directly through Credit Bank-Ria platforms and another 1,350 members receiving financial literacy training.

The program aims to assist 400 Sacco members in increasing their savings by at least 10 per cent.