Role of telecommunication technology in providing international money transfer services to the rural poor in north Eastern Kenya

Abstract

Growing internationalization and opportunity in financial services has entirely changed the competitive landscape, as now many banks have demonstrated a preference for the "universal banking" model so prevalent in Europe. Universal banks are free to engage in all forms of financial services, make investments in client companies, and function as much as possible as a "one-stop" supplier of both retail and wholesale financial services. However, structural weaknesses in the financial industry in Kenya, limit the access to money transfer services, especially in rural areas and for low-income people. This is because banks are concentrated mainly in urban centers and have conditions that constitute barriers to the use of their services. This is has affected money transfers to North Eastern province North Eastern Province is one of the eight administrative provinces in Kenya with a total population of about 1 million people (1999 Population census) covering an area of 126,902 square kilometres. A large percentage of this population considered poor lives on less than 1 US$ a day given the harsh climatic and economic conditions in the areas. Currently, there are a number of local, national and international organisations that provide financial service to the marginalised area of North Eastern Kenya. However, recent developments in technology tend to have changed the way in which money can be transferred to individual persons in the remote areas of North Eastern Province. It is out of this that this study focuses on determining the modes used and role of technology in making international money transfers to the North Eastern province of Kenya that is argued to be poorly served with infrastructure. The objectives of the study were to determine the modes of Money Transfer Systems to the rural poor in North Eastern Kenya, establish the role of technology in International Money transfer services to Northern Kenya and establish the challenges organisations engaged in the International Money Transfer Payments in North Eastern Kenya are facing. This study was aimed at being of importance to the financial institutions in Kenya" international Organisations involved in development initiatives, The Government of Kenya, Scholars and Researchers.