News Desk
\nNAIROBI
\nLast week a man walked into a Nairobi car yard and paid for a luxury Mercedes with a mountain of 1,000-shilling ($10) banknotes, desperate to offload cash that within days would be worthless.
\nWith a deadline looming before the Central Bank of Kenya bans all old edition 1,000-shilling notes, big fish with their fortunes stashed in cash are under pressure to find ways to jettison their money.
\nA new print of the 1,000-shilling banknote, the largest denomination, was rolled out in June, with Kenyans given to September 30 to exchange their old bills at the bank or be stuck with bundles of useless cash.
\nThe operation is aimed at flushing out dirty money being hoarded by tax evaders, crooked businessmen and criminal groups.
\nLarge deposits of the old notes, embossed with the image of Kenya\u2019s founding father Jomo Kenyatta, raise alarm bells at banks and require paperwork to prove their origin.
\nThe central bank in June said there were roughly 218 million 1,000-shilling notes in circulation, but declined to say what proportion was being stashed as black money.
\nKenyan economist Aly-Khan Satchu said devaluing these bills works by \u201ctaking its owners by surprise.\u201d
\n\u201cFour months is a short period of time when you want to launder big sums of money,\u201d he said.
\n\u201cPeople who have that money will definitely try to save what they can.\u201d
\nSo, people are getting creative, devising schemes to quickly unload small amounts of their cash while avoiding detection by the authorities.
\nJohn, a car dealer in Nairobi, recalled his customer last week counting out thousands upon thousands of banknotes to purchase a luxury car worth $74,000.
\n\u201cPeople want to get rid of their old notes, but they know very well that questions will be asked if they go put the money themselves in the bank,\u201d said John, who declined to offer his real name due to the nature of his business.
\n\u201cWhen I go to the bank to deposit money from a car sale, people ask for the papers from the sale, sometimes even copies of emails, but it never goes further.\u201d
\nOther businesses are finding a lucrative side trade in washing 1,000-shilling notes through their tills \u2014 for a bit in return.
\n\u201cI was approached by a friend through another friend and we struck a deal. I get around 500,000 shillings every day to bank together with my daily sales,\u201d said a liquor shop owner who declined to be named in Hurlingham, a district near downtown Nairobi.
\n\u201cIn return I get between five and 10 percent, depending on the amount.\u201d
\nThe amounts being deposited are below one million shillings, the threshold at which banks required detailed paperwork under a new transparency policy imposed by the central bank in June 2018.
\nOne canny businessman in western Kenya dished out his cash in the form of small, interest-free loans of around 50,000 shillings.
\nThe amounts are low, so those exchanging the old bills avoid detection, and upon returning the debt his money is cleaned into new bills.
\n\u201cNothing is written down, it is a gentleman\u2019s agreement,\u201d he said, declining to be named.
\nOther methods involve sinking cash into real estate or investment funds, or businesses moving large volumes of money, several businesspeople said.
\nBut it\u2019s not all underhanded and hush-hush.
\nOne bar in the coastal city of Mombasa is offering to swap banknotes on behalf of drinkers, encouraging punters to spend big at their \u201cOld Notes Send Off Party\u201d being held the eve of demonetization.<\/p>\n","protected":false},"excerpt":{"rendered":"
News Desk NAIROBI Last week a man walked into a Nairobi car yard and paid for a luxury Mercedes with a mountain of 1,000-shilling ($10) banknotes, desperate to offload cash that within days would be worthless. With a deadline looming before the Central Bank of Kenya bans all old edition 1,000-shilling notes, big fish with […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-85128","post","type-post","status-publish","format-standard","category-world"],"yoast_head":"\n