When the coronavirus epidemic broke out in 2020, projections quickly painted a grim picture for remittances in low and middle-income countries. Due to the feared economic implications of the global health crisis, a huge drop was predicted for developing markets.
But the realities that unfolded starkly contradicted forecasts. Defying predictions that it would drop by 20 percent in the [said] year, remittances slowed down only by 1.6 percent. Regardless of the pandemic’s effect on wages and employment in other parts of the world, LMICs received USD 540 B; in 2019, they absorbed USD 548 B.
Meanwhile, in some markets, growth was recorded. A classic example is Kenya, which saw its remittances increase by 10 percent from USD 2.796 B in 2019 to USD 3.095 B in 2020, representing 3 percent of the East African country’s GDP, according to data from its central bank. In 2021, its remittances reached an all-time high of USD 3.7 B.
At the height of the pandemic, Kenyans living abroad sent home more money than ever, thanks to [the] increased innovation efforts in the market’s financial industry. Fintech startups, in particular, have set up rails enabling convenient cross-border financial transactions between families.
