15 December 2006, by Elly Wamari in Nairobi, Kenya. Finally, the value of financial remittances by Kenyans living abroad is getting wider attention. Two new entrants into the money transfer business have been recorded within the past few days, suddenly raising competition in the sub-sector to between four institutions from the traditional two.
Western Union and MoneyGram have been the only recognised money transfer institutions operating in the country. They have been handling millions of dollars in brisk business, mostly in partnership with commercial banks. Kenyans living abroad send about US$ 725 million (KSh 50 billion) back home annually to relatives and friends.
Now PostaPay, introduced by Postal Corporation of Kenya (Posta), and IRNet Coop Kenya (IRNet) launching itself through the co-operative sector, want a slice of that business, and will take advantage of their far-reaching networks across the country.
PostPay service, which will start its international money transfers early next year, has been born out of a partnership between Kenya"s Posta and America"s Afripayments. The service will initially be offered through Posta"s 130 outlets. It will later spread out to the more that 900 post offices the corporation runs in the country. This will make it easier for recipients of remittances to access their money. They will not have to travel far.
IRNet has adopted a similar outreach approach by latching onto savings and credit co-operative societies (Saccos), which are equally well distributed through the country. Through IRNet, Kenyans will receive money sent from abroad via co-operative societies in which they are members.
The system is called Vigo Money Transfer, and will be facilitated by IRNet"s partnership with Vigo Remittance Corporation. The latter is said to have a presence in more than 40 countries worldwide. Presently, IRNet has only seven branches in the country. The service will hopefully spread out as more Saccos join the present nine that are already members.
The new transfer businesses -- promising cheaper services than what presently exist -- come out as a response to G8 last year"s pronouncements that money transfers by people living abroad should be made less costly and easier to deliver. Chairman of Afripayments, Mohammed Yousif, reportedly echoed these sentiments when, in recognition that Africans in the Diaspora often sent money either through expensive networks or via unofficial channels such as transport companies for lack of cheaper ways, he said: "Afripayments goal is to continuously bridge this gap and meet the needs of a larger number of Africans in the Diaspora." Through the new services, Kenya has just launched itself towards that goal.
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