Kenyans living and working abroad have had to cut on their spending to afford sending money back home, a survey by WorldRemit shows.
This is in the wake of rising inflation in economies across the globe, with the US, which is the leading source of remittances, recording a four-decade high inflation of 9.1 per cent in June.
Job cuts have also become imminent amid fears of recession.
Despite this, migrants continue to send money back home, the survey by the global payment firm indicates.
The survey conducted tin June shows 49 per cent of respondents reported that they eat out less, 46 per cent save on day-to-day expenses, while 28 per cent have limited social gatherings to save money.
About 25 per cent of the respondents said they have opted for public transportation rather than driving to save, part of which has seen them continue to support families and friends back at home.
“Migrants’ resilience and commitment to their loved ones back home has proven to be vital, especially in a period where household expenses are increasing around the world,” said Jorge Godinez Reyes, Head of the Americas, WorldRemit.
This latest study proves that even during times of financial instability, many migrants are making adjustments to maintain the regular flow of remittances to families and loved ones back home, Reyes noted.
Majority(52%) however say they now send money to fewer people due to the tough economic times.
The survey involved 3,000 international money senders living in the USA, Australia, and the United Kingdom, aged 18 years and above.
They voluntarily responded to a 13-question survey about how cost of living and inflation has changed behaviours when it comes to sending remittances between June 15 and 29 June.
The survey took place on the a consumer research platform- Attest, targeting people who have sent remittances in the past year.
WorldRemit, which serves more than five million customers across 130 countries worldwide, including Kenya, received responses from 1,000 migrants in each of the countries surveyed, bringing the total number of respondents to 3,000.
Globally, 78 per cent of remittance senders agree that the cost of living has personally affected them, the survey released yesterday notes.
About 75 per cent of respondents said that the cost of living for those they send money to has increased since the start of the year.
For instance in Kenya, inflation hit a two-year high on 7.9 per cent in June on rising food prices and transport costs.
Latest Kenya National Bureau of Statistics (KNBS) data shows the Consumer Price Index, a measure of 12 top items in the food basket, rose to an index of 124.22 compared to 123.12 the previous month.
The cost of living has been rising on a monthly basis since February, hitting 7.1 per cent in May.
“The rise in Kenya’s inflation was mainly due to increase in prices of commodities under food and non-alcoholic beverages, furnishings, household equipment and routine household maintenance,” KNBS notes in its latest report.
Other factors were increased transport costs, housing, water, electricity, gas and other fuels.
Daily expenses, healthcare and educational support continue to be major reasons for sending money back home, the survey indicates.
The resilience of remittances is welcome news for Kenya considering money sent back home by Kenyans in the diaspora represents one of the top sources of forex for the country, surpassing tourism, tea, and horticultural exports in recent years.
Data from the Central Bank of Kenya (CBK) shows that remittances reached $3.71 billion (Sh440.2 billion) in 2021, up 30.7 per cent from $3.09 billion (sh336.7 billion) a year earlier.
Last month, diaspora remittances totaled Sh38.6 billion, a 3.2 per cent drop compared to Sh39.96 billion sent in May.
However,June's inflows were 5.5 per cent higher compared to Sh36.6 million over the same period last year.
“The strong remittances inflows continue to support the current account and the stability of the exchange rate. The US remains the largest source of remittances into Kenya, accounting for 59 percent in June 2022,” CBK says.
Remittances in Kenya have hit a record high every year since 2016.
Globally, the number of Kenyan migrant workers is over four million, according to the Labour ministry,with a greater percentage being skilled youth.
WorldRemit notes that the continued shift to digital remittance technologies has made it more convenient and affordable for those in the diaspora to send money back home.
The London based digital remittances firm also noted that Kenya is among the top three recipients in Africa.
The company processed transactions to Kenya worth Sh24.47 billion as of June 1, 2022.
This figure puts Kenya at par with Zimbabwe and second only to Nigeria, where WorldRemit users globally sent about Sh38.86 billion.
WATCH: The biggest news in African Business
