In a fresh revelation that sheds light on the international movement of money, the Central Bank of Kenya (CBK) has listed the United Kingdom, South Sudan, and the United States as the top three destinations for physical cash exports by Kenyan banks.
This is based on the CBK’s April 2025 Cross-Border Cash Survey, a groundbreaking initiative aimed at tightening regulatory oversight in the context of anti-money laundering (AML), counter-terrorism financing (CFT), and the broader goal of ensuring financial transparency.
Why CBK Is Monitoring Physical Cash Transfers
Despite the surge in digital transactions, the CBK emphasizes that physical currency still plays a vital role in certain economic corridors. In places where digital infrastructure is limited, physical cash remains king. These movements can also support diaspora communities, facilitate regional trade, and assist humanitarian organizations operating in crisis-hit areas.
The latest CBK survey was triggered by recommendations from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), following Kenya’s 2022 Mutual Evaluation Report. The report noted that Kenya needed to strengthen its control over cross-border cash movements, especially to combat illegal financial flows.
The CBK survey focused on identifying the source, volume, destination, and reasons behind the transportation of physical currency by commercial banks and mortgage finance institutions. The findings highlight emerging trends and risks that affect Kenya’s financial ecosystem.
Top Destinations for Kenyan Cash: UK, South Sudan, and the US
Among all countries, the United Kingdom emerged as the top recipient of physical cash shipments from Kenyan financial institutions. The US followed closely, largely driven by Kenya’s strong diaspora remittance links and economic ties. South Sudan, Kenya’s immediate neighbor, surprisingly came in third—indicating deep regional dependencies.
The preference for physical cash among Kenyan banks sending money to these destinations often stems from a combination of factors:
- Diaspora support for families and local projects
- Cross-border trade settlements
- Liquidity support for branches or subsidiaries abroad
- Aid disbursements and operational expenses for NGOs and relief agencies
Read: Kenyan Banks’ Profits Soar in 2024 Amid Economic Challenges
South Sudan: A Unique Case
Despite its volatile economic and political environment, South Sudan remains one of Kenya’s most profitable markets. In 2024 alone, Kenyan banks posted KSh 2.8 billion in net profits from operations in South Sudan, according to CBK’s annual financial sector report. This accounted for over 33% of total profits from foreign subsidiaries.
While profits are strong, the risk environment remains high. Local currencies in South Sudan have faced massive devaluation, and asset values are under pressure. Yet, the demand for Kenyan Shillings and US dollars in Juba and other towns continues, especially for procurement and trade-related activities.
Diaspora Ties and Cash Demand in the UK & US
Kenya’s diaspora remittances hit over USD 430 million in April 2025, with the US and UK contributing the lion’s share. While most of this is transmitted electronically, CBK notes that significant amounts of physical currency still flow outwards—especially through bank branches, diplomatic missions, and special cash shipment channels.
This trend reflects the diverse cash needs of overseas Kenyans. From supporting extended family to investing in Kenyan real estate, many still prefer or require physical money for specific purposes. It also illustrates trust gaps in foreign banking systems or complications in cross-border digital integration.
Regulatory Push: CBK’s AML & CFT Initiatives
The CBK’s focus on physical cash movement isn’t just administrative—it’s a critical pillar of Kenya’s compliance with global financial regulations. As part of its AML/CFT/CPF strategy, the CBK has rolled out:
- Enhanced Due Diligence (EDD) for high-risk transactions
- Suspicious Transaction Reporting (STR) obligations
- Customer Due Diligence (CDD) upgrades
- Targeted Financial Sanctions (TFS) monitoring
- Real-time data tracking for cross-border cash shipments
These reforms are intended to plug financial leaks, prevent money laundering, and block terror financing networks. The CBK is also working closely with Kenyan banks to balance access to cash with robust oversight, especially in politically sensitive regions like South Sudan.
How This Affects Kenya’s Financial Stability
Cash movement is more than just logistics—it affects macroeconomic indicators. High volumes of currency moving in or out of the country influence:
- Foreign exchange reserves
- Inflation
- Currency stability
- Interest rates
CBK’s tighter control mechanisms are also aligned with recent foreign exchange market reforms. These include lowering trading limits for forex dealers, introducing the Electronic Market Surveillance (EMS) platform, and more transparent daily interbank forex rates. All these efforts aim to keep the Kenyan Shilling stable, reduce market volatility, and rebuild investor confidence.
What’s Next for Kenyan Banks?
With these revelations, banks operating in Kenya are now expected to:
- Reassess and strengthen their cross-border cash compliance frameworks
- Map out destination risk profiles, especially for routes like Juba and London
- Train staff to detect unusual patterns in physical currency transactions
- Submit enhanced reporting on cash movements and beneficiary details
CBK will likely tighten reporting timelines and apply sanctions for non-compliance, ensuring all institutions comply with international standards.
Final Thoughts: Cash Still Matters
While digital payments and crypto get all the buzz, this report is a reminder that physical cash still fuels parts of the global economy—especially in fragile regions or underserved communities. The UK, South Sudan, and the US are not just cash recipients; they are critical economic links for Kenya’s regional influence and global engagement.
CBK’s proactive stance enhances transparency, regulatory integrity, and risk protection, without completely shutting the door on the cash economy. In a world chasing digital transformation, Kenya is proving it’s possible to be secure, flexible, and inclusive all at once.
