Bulk cash transactions hit a record Sh3.67trn in June
There exists an informal money lending ‘Shylock’ system across the country in addition to non-deposit taking mobile money lenders.
What you need to know:
- Real-time bank transfers of more than Sh1 million touched a new monthly record in June amid economic recovery.
- Data shows that the average value for each bank transaction hit Sh6.03 million, which is the highest since September 2020 when it stood at Sh6.24 million.
- The CBK requires banks to strictly process and settle payments from Sh1 million through the real-time RTGS/ KEPSS system where cash reflects within four hours of getting instructions.
Real-time bank transfers of more than Sh1 million touched a new monthly record in June amid economic recovery and enhanced political campaign spending ahead of the August 9 General Election.
Transactions cleared and settled through the Kenya Electronic Payments and Settlement System and Real Time Gross Payment System (KEPSS/RTGS) amounted to Sh3.67 trillion in June, according to the latest statistics by the Central Bank of Kenya (CBK).
Data shows that the average value for each bank transaction hit Sh6.03 million, which is the highest since September 2020 when it stood at Sh6.24 million.
The number of daily instructions by businesses and high-net-worth individuals to banks to transfer cash in their accounts dropped to 28,961 in June compared to 30,406 the previous month although the value of daily dealings shot up to Sh175 billion up from Sh155 billion over the same period.
The CBK requires banks to strictly process and settle payments from Sh1 million through the real-time RTGS/ KEPSS system where cash reflects within four hours of getting instructions.
Suspicious transactions
This enables it to scrutinise and flag suspicious transactions that may be linked to money laundering or terrorism.
The high value of transactions underlines the economic recovery that has followed the lifting of Covid-19 restrictions amid a cash spending spree by politicians during their campaigns ahead of this year’s polls.
Many politicians often take out huge loans or empty their savings to fund their campaigns.
The political campaign season in Kenya is traditionally marked by high expenditure on items such as helicopters and merchandise.
For example, for months the Kenyan airspace had been filled with helicopters as politicians took to whirlwind campaigns to woo voters ahead of the recently concluded elections.
With their high convenience for speed and manoeuvrability, the choppers became a hotcake during the campaigns — a possible pointer to the record bulk cash movements in June.
Political groups also spent heavily on merchandise including T-shirts, aprons, caps, scarves, flyers, and posters in an attempt to woo voters through various strategies.
Kenya National Bureau of Statistics (KNBS) data underlined the strong growth of Kenya’s economy in the first quarter of 2022 by 6.8 per cent compared to 2.7 per cent in the first quarter of last year.
“The performance was supported by rebounds in most economic activities that had contracted significantly in the first quarter of 2021 due to measures instituted to curb the spread of Covid-19,” said KNBS.
