Nairobi, Kenya – (African Boulevard News) – Kenya Commercial Bank (KCB), the second largest lender in Kenya, is set to tap into the lucrative US diaspora market. To achieve this, the bank has hired a lobbyist in the United States to help the bank navigate the regulatory and operational environment in the US.
This move by KCB is aimed at boosting remittances from Kenyans living in the US. Currently, the US is the largest source of remittances to Kenya, which totaled to $3.1 billion in 2020, up from $2.8 billion in the previous year. Speaking on this development, Joshua Oigara, the CEO of KCB Group, said, “We want to deepen our engagement with Kenyans in the diaspora, particularly those living in the US, where we see a huge potential for growth.”
The bank plans to leverage its established partnerships with several Kenyan community-based organizations in the US to reach out to the Kenyan diaspora. The bank also intends to introduce new products and services tailored to the needs of this segment, including diaspora-focused investment options and mortgage products.
The US market has become increasingly important for African banks, as other lenders such as Equity Bank and Co-operative Bank of Kenya, have also made moves to expand their presence in the US to increase remittances.
Remittances from the diaspora are a crucial source of foreign exchange earnings for Kenya, and the country has been keen to grow its diaspora market. According to data from the World Bank, remittances to Kenya accounted for 5.7% of the country’s GDP in 2020, making it the largest source of foreign exchange ahead of tea, horticulture, and tourism.
However, the COVID-19 pandemic has had a significant impact on the diaspora remittances to Kenya, with a drop of 2.6 percent in 2020, compared to the previous year. This has prompted Kenyan banks to explore new ways of expanding their diaspora market.
In conclusion, KCB’s move to tap into the US diaspora market is a strategic one, as the US remains a key source of remittances to Kenya. With its established partnerships and new products tailored to the diaspora market, KCB is well-positioned to grow its share of the US remittance market.