Indicator 10.c.1 Remittance costs as a proportion of the amount remitted

Goal 10: Reduce inequality within and among countries

Target 10.c: By 2030, reduce to less than 3 per cent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 per cent

Indicator 10.c.1: Remittance costs as a proportion of the amount remitted

2024

G20 5x5 target – Remittance cost reduction for development. In 2009, the G8 set a target, later adopted by the G20, to reduce the cost of international remittances from 10 percent to 5 percent within five years. The target was dubbed the “5x5 Objective.”

Kenya National Bureau of Statistics

Senior Manager, External sector, Fiscal and Financial Statistics

External sector, Fiscal and Financial Statistics

Production and dissemination of External sector, Fiscal and Financial Statistics

254-202-911-000

30266-00100, Nairobi- Kenya

dmes@knbs.or.ke

Definition:

The target includes two components. The first component is that transaction costs for migrant remittances should be 3% or less by 2030. This transaction cost should be intended as “Global average total cost of sending $200 (or equivalent in local sending currency) and expressed as % of amount sent”. This indicator is readily available and published on a quarterly basis by the World Bank in the Remittance Prices Worldwide database, which covers 365 country corridors, from 48 sending to 105 receiving countries. The second component is to eliminate corridor where cost is 5% or higher. This should be intended in the sense that it should be possible for remittance senders to send money to the beneficiary for an average cost of 5% or less of the amount sent. For this purpose, it should suffice that in Last updated: 2022-03-31

each corridor there are at least 3 services, meeting a defined set of service requirements (including service quality, reach etc.), for which the average is 5% or less.

Concepts:

International remittance transfer. A cross-border person-to-person payment of relatively low value. The transfers are typically recurrent payments by migrant workers (who send money to their families in their home country every month). In the report, the term “remittance transfer” is used for simplicity (ie it is assumed the transfer is international).

Remittance service. A service that enables end users to send and/or receive remittance transfers.

Remittance service provider (RSP). An entity, operating as a business, that provides a remittance service for a price to end users, either directly or through agents. These include both banks and money transfer operators, as defined below.

Money transfer operator (MTO). A non-deposit taking payment service provider where the service involves payment per transfer (or possibly payment for a set or series of transfers) by the sender to the payment service provider (for example, by cash or bank transfer) – i.e. as opposed to a situation where the payment service provider debits an account held by the sender at the payment service provider. MTOs may include both traditional players focusing on delivering funds in cash and innovative players which may adopt a variety of different business models for the delivery of the transactions.

Price. The total cost to the end users of sending a remittance transfer (including the fees charged to the sender and the margin by which the exchange rate charged to the end users is above the current interbank exchange rate).

Transparent service. A remittance service for which the sending cost can be split into its two components: transfer fee and foreign exchange margin. If a provider does not disclose the foreign exchange rate applicable to the transaction, then the service is considered not transparent.

Cost expressed as % of amount sent

None

Central Bank of Kenya

Extracting Administrative data from Central Bank of Kenya

2009 - 2023

2024

Central Bank of Kenya, KNBS

Kenya National Bureau of Statistics

According to the Statistics Act of 2006, Kenya National Bureau of Statistics is mandated to collect, compile, analyze, publish and disseminate official statistics for public use.

Data for these indicators have been collected by the World Bank through the Remittance Prices Worldwide (RPW) database since 2008 for the purpose of monitoring the G8 / G20 target on reducing remittance prices. Also known as the “5x5 objective”, this goal was adopted by the G8 in 2009, and it refers to reduction of the global average total cost of migrant remittances by 5 percentage points in 5 years. To achieve this objective, the governments in both sending and receiving countries should consider implementing reforms based upon the General Principles for International Remittances Services by the World Bank/Committee on Payment and Settlement Systems (January 2007). This internationally agreed framework has proven effective in helping reduce the cost of remittances and guiding actions to enhance the efficiency of international remittances. The World Bank’s RPW database is the only global database that monitors remittance prices across all regions of the world. RPW was launched by the World Bank in September 2008, and is a key tool in monitoring the evolution of costs to the remitters and the beneficiaries from sending and receiving money in major country corridors.

Not Applicable

The average cost is calculated as the simple average of total costs (including both fee and exchange rate margin) quoted by each remittance service providers (RSP) operating in a corridor.

Not Applicable

Minimum requirements for national and regional databases are provided on the Remittance Prices Worldwide website at: https://remittanceprices.worldbank.org/en/national-and-regional-databases-certified-by-the-world-bank. For consistent methodology, the following minimum requirements were established:

• 1. Double price points data gathering
• 2. Collection of fees for the sender
• 3. Collection of the exchange rate applied
• 4. Provision of total amount of the identified costs
• 5. Speed of the transaction
• 6. Type of service provided
• 7. Minimum of 60% of market coverage per corridor
• 8. Independence of the researchers
• 9. Validation through mystery shopping exercises
• 10. No advertisement policy
• 11. No subscription policy and clear funding process
• 12. Linkage with other WB-approved databases

More information is available in the policy paper on Remittance Price Comparison Databases: Minimum Requirements and Overall Policy Strategy – Guide and Special-Purpose Note, available at: https://remittanceprices.worldbank.org/sites/default/files/StandardsNationalDatabases.pdf

Web site for Remittance Prices Worldwide database and related resources: http://remittanceprices.worldbank.org

The Kenya National Bureau of Statistics is ISO certified based on 9001:2015 Standard requirements. The processes of compilation, production, publication and dissemination of data, including quality control, are carried out following the methodological framework and standards established by the KNBS, in compliance with the Internationally acceptable standards

The KNBS adheres to Kenya Statistical Quality Assurance Framework (KesQAF) that underlines principles to be assured in managing the statistical production processes and output.

Data consistency and quality checks are conducted through Technical Working Groups (TWGs) before publication and dissemination.

The processes of compilation, production, publication and dissemination of data, including quality control are subjected to a set criteria and standards to ensure conformity.

Not Available

Not Available

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