Kenyans have continued to favour transactions in hard cash despite a digitisation wave that has given rise to mobile money and internet banking.
According to data from the Central Bank of Kenya (CBK), total currency in circulation reached an all-time high of Sh315.97 billion in June 2023, comprising Sh305.41 billion in bank notes and Sh10.56 billion coins.
The CBK attributes this growth to sustained demand for notes and coins by banking customers.
“The net increase of currency in circulation was attributed to higher currency outflows (withdrawals) compared to net inflows (deposits),” the CBK stated.
Bank deposits of notes and coins at CBK vaults totalled Sh544.6 billion against Sh555.3 billion in withdrawals, resulting in a net Sh10.6 billion increase in the circulation of physical cash.
The high use of notes and coins has continued despite a notable growth in digital payments solutions, particularly after the onset of the Covid-19 pandemic.
David King’oo, an economist, notes that the economy remains largely informal, informing the preference for bank notes and coins in payments.
“We still have a high population of small and medium enterprises who make up the bulk of transactions in the economy, the majority of whom are yet to be digitised. It’s easy for one to sell a goat at a market, receive payments in cash and move to the next shop and pay for groceries,” he noted.
Previous CBK data showed the Sh1,000 note has the highest circulation.