Start a Remittance business from the US to Kenya
Kenya is a country located in East Africa with a population of over 53 million. With a GDP of GDP 110.35 billion in 2021, it is one of the leading recipients of remittances in the region.
The Kenyan diaspora in the US is estimated to be somewhere around 150,000. Texas and California are said to host the largest population of Kenyan Americans in the US. Like immigrants from other countries Kenyan immigrants have settled in US for better futures and they are well-educated and economically successful.
State of Remittance in Kenya
Remittance makes upto 3.4% of Kenya’s GDP. In 2022 it received approximately 3.9 billion USD in remittances. The remittance they send back home is a very important source of income for Kenyan families and plays a significant role in the country's economy. Kenya's government has recognized the importance of remittances to the country's economy and has taken various steps to encourage and facilitate remittance flows. Given, this is the cornerstone of Kenya’s economy.
For example, Kenya's government has reduced transaction costs associated with remittances, streamlined the process of receiving funds, and established diaspora investment initiatives to encourage investment in the country. The government has been supportive of the fintech industry and allowed the industry to grow rapidly in the country. The fact that a large part of the population is unbanked also presents significant market opportunities for fintechs start ups to innovate.
Local companies that facilitate US to Kenya remittance
Some of Kenya’s homegrown remittance fintechs that have revolutionized the remittance industry are:
M-Pesa: One of the most notable achievements in Kenyan Fintech space is the introduction of mobile-money service through M-Pesa. The service is said to have revolutionized the remittance market in Kenya. It enables users to send, receive and store money from one country to another through their mobile phones, without the need of a bank account.
BitPesa: BitPesa is a blockchain-based remittance platform that allows users to send money to Kenya and other African countries using digital currencies such as Bitcoin. The service offers fast and low-cost transfers.
Similarly there are a wide number of banks with strong focus on remittance services.
- Equity Bank
- Co-operative Bank
- Family Bank
- I&M Bank
- Prime Bank
- Chase Bank
- Kenya Commercial Bank (KCB)
- Gulf African Bank
- NIC Bank
Kenyan Fintech Startups in Remittance
Kenya has a vibrant entrepreneurial culture which has led to the emergence of many fintech startups and so goes in the money transfer space. Some noteworthy startups are:
Paopay: A homegrown remittance company providing a secure, quick, cost-effective and easy way for global Kenyans to remit money to Kenya. Their recipients can receive money through direct deposit, home delivery or pick-up at one of our branches. The recipient does not need to have a bank account or computer access.
Temboremit: It specializes in providing affordable, fast, and secure digital remittance services at competitive exchange rates and multiple delivery channels.
Tulix : A P2B app that enables Kenyans globally to instantly pay to a business in Kenya from anywhere in the world using mobile money. It operates its ‘jar’ concept. Users can pay for day-to-today expenses like airtime, groceries and or for expenses like school fees and medical bills from anywhere in the world. It operates with a concept of jar, where jar is a place where you set aside money for specific uses.
Eastpesa: It allows users to remit amounts of between USD 10 USD 500 instantly to Kenya. The transfers are made using credit and debit cards as well as mobile money wallets including M-Pesa. Its users are mainly from the US, the UK, Nigeria, Botswana.
Sawapay: SawaPay is a cost-effective application for international money transfer and payments, offering zero-fee transactions, instant money transfers, payment services, and bank account deposits. SawaPay also allows users to pay for utilities, including water, power, and mortgage payments.
Pexbank : A tech-enabled platform that provides instant payment processing to allow recipients of diaspora remittances to receive money for local expenditure. They provide multiple payment options to help you receive or send cross-border payments through network of people around the globe.
These startups compete with international money transfer giants like Wise, Remitly, Paysend, Instarem and Sendwave.
Start US to Kenya Remittance with Machnet
For growing startups, fintech and Money Transfer Operators (MTOs) that are looking to tap into the huge market of US to Kenya remittance, Machnet is an all-in-one platform that enables them to kickstart their remittance service. While the US-Kenya corridor is lucrative, it is also very complex and there are specific challenges to the US Market . For instance the time and cost to build a compliance and tech infrastructure is massive.