Many Kenyans living abroad are looking for ways to invest back home, but they are now considering opportunities that balance security, liquidity, and returns.

Last year, this group of Kenyans sent home a record Sh640.75 billion, which is an 18 per cent increase from the previous year, highlighting their growing financial influence on the local economy.

However, they have recently found themselves between a rock and a hard place when they invest back home.  

Many diaspora investors entrust relatives with their investments, only to face mismanagement, embezzlement, or misuse of funds for personal expenses rather than the intended purposes.

Many diaspora investors have also lost money to fraudulent real estate deals, fake investment schemes, or untrustworthy intermediaries.

Without being physically present, verifying property ownership, construction progress, or business operations becomes difficult.

Despite various diaspora banking and investment products, many Kenyans abroad struggle to find secure, transparent, and convenient financial platforms to send money or invest in property, stocks, or businesses.

But according to Edison Mochiemo, Co-operative Bank Diaspora manager, fixed deposits remain a favoured option for those new to investing, offering guaranteed returns for short-term commitments.

“With as little as Sh50,000, investors can lock in their money for periods ranging from 1 to 24 months,” he said in a recent podcast.

“Financial institutions are currently offering competitive rates, making this a low-risk entry point for those seeking stable returns.”

For those with unpredictable cash flow needs, call deposit accounts provide an alternative, allowing withdrawals at any time without sacrificing interest.

This flexibility makes them attractive for investors who may need to access their funds on short notice while still earning on idle cash.

On the other hand, Mochiemo tipped Money Market Funds (MMFs) to have also gained traction, with some offering daily interest accruals of up to 11.9 per cent, making them an increasingly popular choice for short-term liquidity management.

Government securities

In the government securities space, Treasury bonds and bills continue to attract long-term investors. Treasury bonds, with durations of 7 to 20 years, provide periodic interest payments, while Treasury bills, maturing in 91 to 365 days, offer short-term gains with relatively lower risk.

“With the government consistently issuing these instruments, diaspora investors have a stable avenue to grow their wealth while contributing to national development,” he said.

Real estate remains a high-interest sector, particularly for those looking for tangible investments.

While traditionally capital-intensive, property investments in Kenya continue to yield strong returns, especially in growing urban centres. However, he noted, navigating the market requires due diligence, as fraudulent deals and regulatory challenges remain concerns.

Industry experts advise diaspora investors to work with tier-one banks and reputable developers to mitigate risks.

Despite the range of options, credibility and tax implications remain key considerations.

Engaging with established financial institutions reduces exposure to fraud, while Kenya’s tax framework ensures that investment earnings are subject to fixed rates without the risk of double taxation.

Analysts note that with financial products now tailored specifically for the diaspora, investing back home is becoming increasingly accessible.

However, investing in Kenya as a member of the diaspora requires careful planning and strategic decision-making to avoid common pitfalls.

Conducting thorough due diligence is crucial before committing funds to any investment opportunity. Relying solely on recommendations from friends or family can be risky, so taking time to assess the viability of an investment independently is essential.

Seeking professional services from experienced lawyers, investment firms, and trusted financial institutions can provide an added layer of security.