Treasury, October 6, 2015: By Joseph Kipkoech
The Central Bank of Kenya (CBK) has directed commercial banks to streamline the supply of coins as it warned retail outlets against giving customers alternative goods as change instead of coins.
The bank, which regulates issuing of currency, said the practice of offering shoppers airtime, matchboxes and sweets for low-value change has become a concern.
Retailers denying customers the possibility of obtaining their change in currency or opportunity to agree on any other form of settlement were violating the law, the CBK said last week on Friday.

“The law requires that all monetary obligations or transactions entered into or made in Kenya be settled in Kenya currency unless otherwise provided for by the law or agreed upon between parties,” it said in a statement.
Shoppers should only be given sweets as change if they choose, the regulator warned, maintaining there was adequate stock of coins held by commercial banks.
The face-off between the CBK and traders over the use of mainly sweets as change in place of low-denomination coins usually below Ksh 10, is not new.
Concerns of over shortage of Ksh1 and 50-cent coins started taking root in August 2010 when some outlets published notices warning their customers to this effect.
At the same time, customers were forced to forgo their change, mainly in 50-cent and Ksh 1 denomination, paying more than the market price as a result.
In November 2012, the CBK moved to allay fears of an acute shortage, disclosing that it had issued 1.31 billion coins valued at Ksh 5.1 billion that month alone.
It went ahead to launch a week-long national campaign, dubbed chomoa coins to encourage households hoarding coins to start spending them.
On Friday last week, the banks did not disclose the volume or value of coins in circulation, but insisted there was enough stock.
“Commercial banks, supermarkets and other entities should desist from the practice of issuing alternative products instead of currency coins on the basis of bulkiness or perceived shortages,” the CBK said. “Accordingly, the Central Bank of Kenya urges commercial banks to ensure that coins are re-circulated efficiently at all times to their respective customers.”
Largest retail chain by market share, Nakumatt Holdings, however denied it was issuing sweets to customers in place of coins. The retail said it is instead encouraging customers to transact using debit and credit card as well as mobile money service like M-Pesa.
“At Nakumatt, we have embraced technology-based solutions as we seek to foster a cash-lite economy,” it said in a statement. “We remain in constant contact with our bankers for provision of sufficient coins. We never dispense any sweets for change.”