Diaspora Remittances Emerge as Lifeline for Kenyan Households Amid Rising Cost of Living

Money sent home by Kenyans abroad is playing an increasingly critical role in supporting families. New data shows remittances are far higher than official records previously indicated.

A nationwide survey by the Kenya National Bureau of Statistics (KNBS), Central Bank of Kenya (CBK) and FSD Kenya estimates that Kenyans in the diaspora sent home Sh931.8 billion in the 12 months to May 2025, revealing a substantially larger contribution to household incomes than captured through formal financial channels alone.

The study found that while CBK recorded Sh651.2 billion in formal remittance inflows, an additional Sh280.6 billion moved through informal channels. These included hand-carried cash, money sent through relatives travelling home, Hawala networks and cryptocurrencies.

FSD Kenya Chief Executive Rashmi Pillai said the findings exposed an “invisible 40 percent” of remittances that remain outside official reporting systems, largely because senders prefer cheaper, faster and more accessible transfer methods.

The survey highlights the growing importance of diaspora funds in helping households cope with economic pressures. More than seven in ten recipient households reported using a significant portion of remittances to purchase food and other basic necessities.

Beyond daily consumption, remittances also supported education, healthcare, clothing, rent and family ceremonies. Education accounted for the largest share of spending at 31.4 percent, followed by medical expenses at 23.9 percent and clothing at 19.8 percent.

For many families, remittances have become a key source of financial support. About 42.3 percent of surveyed households described the funds as supplementary income, while 36.4 percent considered them an additional income stream. A further 22.3 percent said remittances were their primary source of livelihood.

The United States remained Kenya’s largest source of remittances, contributing Sh405.4 billion or 43.5 percent of total flows. Germany, Australia and Saudi Arabia were among the other leading sources of diaspora transfers.

The findings suggest that the economic contribution of Kenyans abroad is significantly larger than previously measured, reinforcing the diaspora’s growing role in sustaining household welfare and supporting the country’s economy.