Why Exchange Rates Matter More Than Transfer Fees When Sending Money to Kenya

The exchange rate applied to a money transfer can significantly affect how much Kenyan families receive, even when the transfer fee is low or waived.

For Kenyans living abroad, sending money home supports household expenses, school fees and small businesses. The amount received, however, depends not only on the transfer fee but also on how the provider converts the sender’s money into Kenyan shillings.

Some services advertise low or zero transfer fees but offer less favourable exchange rates. This can reduce the amount received in Kenya. Other providers may charge a visible fee while offering a stronger exchange rate, resulting in a higher final payout. 

The World Bank’s Remittance Prices Worldwide database tracks both transfer fees and exchange-rate margins. Currency movements also affect the value of remittances. 

The Kenyan shilling’s exchange rate against major currencies changes over time, influencing how much recipients receive. The Central Bank of Kenya reported that the shilling averaged Ksh129.37 against the US dollar in the 2024/25 financial year, compared with Ksh144.18 in the previous year. 

Diaspora remittances were among the factors supporting the currency. For households that depend on monthly transfers, small differences in exchange rates can add up over time. They can affect household budgets, savings and the amount available for other expenses throughout the year.

The way money is delivered also affects the transfer process. Digital platforms can send funds directly to bank accounts or mobile-money wallets, providing a fast and convenient option. LemFi, for example, allows users to select the sending and receiving currencies and shows the applicable exchange rate before a transaction is confirmed.

By combining competitive exchange rates with low-cost transfers, such services give senders more information when comparing their options. The most useful measure is ultimately the amount that reaches the recipient in Kenya, rather than the transfer fee on its own.

For families that rely on remittances, comparing the final payout can help ensure that more of the money sent from abroad reaches its intended purpose.