Why creating lasting wealth from remittances should be Kenya's diaspora's next priority

Every month, millions of shillings flow into Kenyan households from sons, daughters, parents and friends living and working abroad. They help pay school fees, settle hospital bills, build homes, support businesses and provide a financial lifeline to families across the country.

Behind every transfer is a story of determination: a nurse working long shifts in the United States, a software engineer in Canada, a construction manager in Qatar or an entrepreneur in the United Kingdom who has chosen to pursue opportunities abroad while remaining deeply invested in Kenya's future.

Collectively, these sacrifices have become one of Kenya's greatest economic success stories. An estimated three million Kenyans now live abroad, sending home more than Ksh.650 billion in 2025 alone, making remittances the country's largest source of foreign exchange and contributing around 3.6 per cent of Gross Domestic Product.

According to a recent Kenya remittances household survey, between June 2024 and May 2025, Kenyan households received Ksh.931.8 billion in remittances, with more than 92 per cent flowing through formal financial channels. The United States alone accounted for almost half of these inflows.

These numbers tell a remarkable story. But they also pose an important question. What if remittances did more than meet today's expenses? What if they became the foundation of tomorrow's wealth?

For many families, remittances are understandably spent on immediate needs. Food must be bought, rent paid, children educated, and medical bills settled. These are essential priorities that improve lives and create opportunities.

Once these needs have been met, many diaspora families face another challenge: how to make the money they have worked so hard to earn continue working for them.

Keeping savings idle in a bank account or investing only in land and residential property may no longer be enough in today's increasingly sophisticated financial landscape. While property remains an important asset, true financial security is often built through diversification; spreading investments across different asset classes to balance risk and create sustainable long-term returns.

This is where professionally managed collective investment schemes, such as unit trusts, deserve greater attention from Kenya's diaspora.

Unlike investing directly in individual shares or bonds, unit trusts pool money from many investors into professionally managed portfolios. These portfolios may invest in money market instruments, government securities, corporate bonds and listed equities, allowing investors to access a diversified portfolio that would otherwise require significant capital and investment expertise.

For Kenyans living thousands of kilometres away, this offers several advantages.

First, professional fund managers continuously monitor markets, assess risks and adjust portfolios as economic conditions change. Diaspora investors do not need to follow every movement in interest rates or stock markets because their investments are managed by licensed professionals.

Second, diversification helps reduce risk. Rather than placing all savings into one property, one business or one investment, investors spread their capital across multiple assets and sectors. As the old saying goes, don't put all your eggs in one basket.

Third, unit trusts make investing more accessible. Many funds allow investors to start with relatively modest amounts and contribute regularly over time. This makes them particularly suitable for diaspora workers who send money home every month and want to build wealth gradually rather than waiting until they have accumulated a large lump sum.

Millennials and Generation Z now account for 63 per cent of Kenyans living abroad, while 61 per cent relocated primarily for employment. This younger, economically active population is likely to continue growing its earnings and savings over the coming decades.

Many already see Kenya as a place to build their future by buying a house, educating their families, investing in businesses or preparing for retirement.

Professional fund management allows investors to benefit from experienced investment teams while focusing on their own careers and families.

This becomes even more important as Kenya's investment landscape continues to mature. Investor appetite for financial assets has remained strong, with recent government securities attracting significant demand from both institutional and retail investors. This demonstrates growing confidence in regulated investment markets and provides investors with an expanding range of professionally managed opportunities.

Financial institutions therefore have an opportunity to rethink their relationship with the diaspora.

For many years, the focus has rightly been on making remittances faster, cheaper and more secure. The next step should be helping Kenyans abroad convert those regular transfers into diversified investment portfolios that support education, home ownership, retirement and intergenerational wealth.

Equally, financial education must become part of every remittance conversation. Sending money home should not be the end of the financial journey. It should be the beginning of a broader conversation about preserving wealth, managing risk and achieving long-term financial goals.

Many Kenyans abroad remain cautiously optimistic about investing in Kenya, probably due to concerns around transparency, fraud and access to credible investment opportunities. Addressing these concerns through stronger governance, investor protection and professional financial advice will be essential in unlocking greater diaspora investment.

The writer is the head of asset consulting and unit trust at Octagon Africa.