A booming interest in the topic of international remittances has developed over the past few years on the part of academics, donors, international financial institutions, commercial banks, money transfer operators, microfinance institutions, and policy makers. The surge of remittances to countries of origin in the last two decades and foreign direct investment (FDI) to developing countries, has reignited debate on their development potential in receiving countries. Alongside the interest in remittances, there is also growing recognition of the importance of transnational practices in shaping the relationship between migration and remittances. The 2003 World Bank report noted that remittances are more stable than other kinds of external financial flows and indeed seem to be counter cyclical. The main objective this study was to determinate the effect of international remittances on the economic growth in Kenya. The study also investigated the causality between international remittances and economic growth. The data used was sourced from World Bank’s Development Indicators for the period 1993 to 2013. The study used Granger Causality to investigate the causality between international remittances on economic growth in Kenya. The ordinary least squares estimation was used to determine the effect of international remittances on economic growth. From the discussion of the findings above, it can be concluded that the international remittances indicators are significant factors influencing the economic growth in Kenya. Thus it can be concluded that economic growth in the Kenya is largely driven by international remittances.
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