Kenyans living in the diaspora are contributing far more to the local economy than official figures have previously shown, with a new survey revealing that approximately Sh280.6 billion in annual remittances flows into the country through informal channels and non-cash transfers.
According to a nationwide study conducted by the Kenya National Bureau of Statistics (KNBS), the Central Bank of Kenya (CBK) and Financial Sector Deepening Kenya (FSD Kenya), total diaspora remittances reached Sh931.8 billion in the 12 months to May 2025. The figure includes both cash and in-kind transfers delivered outside conventional financial systems.
The amount exceeds the Sh651.2 billion recorded by the CBK through formal channels such as banks, mobile money platforms and licensed remittance providers by more than Sh280 billion, highlighting a significant volume of previously unaccounted-for inflows.
The survey, conducted in August 2025 and involving 4,400 households across the country, represents Kenya’s first comprehensive assessment of household remittance patterns. It found that cash transfers amounted to Sh848.4 billion, while goods and other non-cash contributions were valued at Sh83.5 billion.
FSD Kenya Chief Executive Officer Rashmi Pillai said the findings exposed a substantial portion of remittances that had remained invisible in official data.
“The report has revealed the invisible 40 percent of remittances that we did not see through informal channels. This includes money handed to relatives travelling home or items carried in personal luggage,” she said.
Many Kenyans abroad rely on informal methods such as carrying cash personally, sending money through visiting relatives, using Hawala networks or transacting through cryptocurrencies. Lower costs, convenience and quicker delivery were cited as key reasons for avoiding formal channels.
The survey also found that around 30 percent of diaspora Kenyans delivering goods to relatives preferred to transport the items themselves or entrust them to friends and family travelling to Kenya. This approach helps avoid high shipping fees, customs procedures and potential losses during transit.
For migrants residing in neighbouring countries such as Uganda and Tanzania, road transport remains a popular option. About 26.8 percent reported using buses, matatus, motorcycles and bicycles to send goods across borders, benefiting from strong social networks and relatively short travel distances.
The findings underscore the growing significance of remittances in supporting Kenyan households amid rising living costs and limited wage growth. More than 73 percent of recipient households said remittances were primarily used to purchase food and essential household items.
Education and healthcare were also major spending priorities, accounting for 31.4 percent and 23.9 percent of remittance use respectively. Other common uses included clothing purchases, rent payments and financing social events such as weddings and funerals.
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The report noted that remittances play a critical role not only in sustaining day-to-day consumption but also in supporting investments in education and healthcare, which contribute to long-term human capital development.
Among households surveyed, 42.3 percent described remittances as a supplementary income source, while 36.4 percent viewed them as additional earnings. For 22.3 percent of households, remittances represented their primary source of livelihood.
The United States remained Kenya’s largest remittance source, accounting for Sh405.4 billion, or 43.5 percent of total inflows. This comprised Sh388.1 billion in cash transfers and Sh17.3 billion worth of goods such as clothing, footwear and electronics.
Germany emerged as the second-largest source at Sh85.98 billion, followed by Australia with Sh62.6 billion and Saudi Arabia with Sh49.2 billion.
The survey also revealed substantial remittance flows from countries such as Germany and Australia that are not fully captured in conventional CBK reporting. These nations have become increasingly important destinations for Kenyan professionals, students and skilled workers, helping explain their growing contribution to diaspora inflows.
