Category Archives: Western union

Money Transfer within Kenya

I had a situation over the weekend, where I was faced with a choice of having someone send money instantly to me while I was in Eldoret – and this led to a discussion of the cash remittance business in Kenya

Past:  Surprisingly, Western Union and Moneygram, which have been recording growing volumes and signing up new banks (like KCB) every month, already represent the past in money remittance. The reason for this is the cost of the transfer, which now puts off savvy consumers. E.g. to send 10,000 shillings to Eldoret, the cost was 1,700 (14.5%) via Western Union and 1,850 (15.6%) via Moneygram.

  • Transaction time: a few seconds
  • Cost: about 15% of amount transferred
  • Convenience: All major towns, available at over 10 bank and dozens of forex bureaus which have extended hours.

Present: With recent investments and advances in IT, banks like Barclays and Standard Chartered are now fully networked, with transactions made instantly reflected in accounts. For cash remittance, I’ll give a friend my Barclays account number, and he’d go to his local Barclays branch, e.g. in Mombasa, or Kisumu, and deposit the money into my account – and I’d be able to withdraw it almost instantly in Eldoret.

  • Transaction time: a few minutes
  • Cost: 0 – 500 shillings (depends on withdrawal fees at the bank for over the counter transactions since cash it not always reflected at the ATM)
  • Convenience: One must have an account with a bank which is networked e.g. Barclays, Standard Chartered, NBK, ABC and the bank should have a branch. But banks have very short working hours usually 9 a.m. – 3 p.m. KCB which has the country’s largest branch system has not networked all its branches yet.

Future:  The future will be for money transfer via cellphone, as is already taking place in the Philippines and South Africa. Like MTN, Safaricom and Celtel will one day launch cellphone banking systems to capitalize on the millions of cell phone users, who don’t operate bank accounts, especially in rural areas, where banks have been closing unprofitable branches.

  • Transaction: a few seconds
  • Cost: transaction fee to be determined
  • Convenience: Safaricom and Celtel combined have over 5 million subscribers. Also one can expect market leaders like Western Union and Barclays to capitalise on cell phone banking.

Banking News

ADB: The New head of the African Development bank ADB will be elected on 22. This was after USA and France combined to scuttle Nigeria’s bid for the presidency – according to the Business Day (SA) newspaper. Donors threw their weight behind the Rwandan candidate, Donald Kaberuka. Kaberuka met the criteria on total votes polled but did not meet the regional vote percentage required, while Bisi Ogunjobi, the Nigerian candidate, likewise met the criteria on regional votes but missed that of the total votes polled. According to the East African (Kenya), most countries are determined that the president should not be from a French-speaking country.

KCB: Kenya Commercial Bank will begin offering Western Union services at all branches soon.

EIB: The European Investment Bank (EIB) has opened the first of three first regional office in Sub-Saharan Africa in Nairobi – to cover Central And East Africa.

NBK: National Bank of Kenya is carrying out a retrenchment package that will cost over 80 million shillings ($1m). It is being done in three phases: employees who are over 50 years, followed by non-performing staff. After that, it will be voluntary retirement for anyone wishing to leave the Bank.

Executive Changes: 

  • NIC Bank has a new Managing Director James Macharia.
  • Robert Barry, the CFC Group MD has resigned for personal reasons.
  • Mr Albert Ruturi, the Chief operating officer at KCB is retiring. The Bank, which is searching for a deputy CEO, has placed an advertisement in the Economist magazine, leading to the possibility that a non-Kenyan will be picked.