Demand for low denomination local currency has spurred Bank of Uganda to consider the Shs 1,000 coin
Three men are standing on the pavement along Burton Street holding bundles of cash, flashing them at passersby like they were newspapers. The notes range between Shs 1,000 and Shs 5,000.
"Change! Change! Change!" they chant.
Similar scenes are playing out in Kikuubo, Kampala's busiest manufactured goods market, Constitutional Square, the taxi parks, Owino Market, and others busy trading places.
For a growing number in Kampala, selling change to desperate retailers has become a viable way to earn a living, as demand grows.
"Business is working for me," said one seller on Burton Street, who mentioned his name only as Jacobs. "I get more than 10 people every day demanding for change."
Charges for change depend on denomination and amounts. For change equal to a Shs 5,000 and Shs 10,000 note, the fee is Shs 500; For a Shs 20,000 note, a customer pays Shs 1, 000; Shs 50,000 costs Shs 2,500 and Shs 100,000 attracts a Shs 5, 000 charge.
Jacobs says he makes over Shs 25,000 in profit a day, equal to Shs 650,000 a month, which is above the monthly gross salary of many civil servants.
Jacobs has been doing the "change" business for three years now and says profits have doubled since he started in 2010.
"I am happy with it," he says with a smile, adding that his gains have attracted many of his friends to leave other businesses to sell change.
Jacobs says his biggest challenge are the long hours he spends lining up in banking halls, including Bank of Uganda, to collect free change. "You can sometimes take an hour, waiting to be served," he said.
Ironically without those lines at the bank Jacobs would have no business, as without them, most people would get their own change in the bank for free, taking away many of his customers.
Matia Mulumba, a vendor of snacks and soft drinks in Kampala, says his business cannot do without change, and he always buys it on the street.
"I have never entered a bank," Mulumba said when asked why he buys from the street instead of getting it free from banks. "Why would I go there when I can easily get change here?"
Mulumba is however careful not to fall in the trap of counterfeiters. "I bought fake change once, so now I'm very careful," he said. Demand for low denomination currency is rising, yet supply remains limited because most people do not have bank accounts, and therefore no direct access to their choice of denominations. Even ATMs only dispense high denominations.
"Demand for change is going up because of increased economic activities in the country that require change for the various transactions as evidenced by the multiple business units," said Bank of Uganda's Acting Communications Director Christine Alupo.
However, commercial banks The Independent spoke to said their doors were always open for change seekers.
"I don't know what happens in other banks but we welcome anyone," said Crane Bank Managing Director A. R. Kalan.
Stanbic Bank's Head of Marketing Jackie Namara said some people just found the streets more convenient than banks.
"It is quicker to get change from streets, but also risky because many buyers cannot easily differentiate fake from genuine currency," Namara told The Independent recently. "At least you can trust bank tellers," she said. "With street sellers, anything can happen."
However, Namara said dispensing of low currency denominations was limited because most people who go to banks reject them. "We have seen most people refusing smaller notes in our various branches while withdrawing across the counter," she said. "That's why dispensing them via ATMs would not make a lot sense." Namara said dispensing coins by ATM may be a good idea, but it needed considerable investment in technology.
"I would advise anybody needing change to go to any of our branches."
BoU responds Alupo said the central bank had opened a window specifically to issue low denomination currency free of charge at its head office banking hall, branches and currency centers in Jinja, Mbale, Gulu, Mbarara, Arua, Fort Portal, Kabale and Masaka.
"BoU has adequate stock of low denomination currency," she said, adding that low denominations comprise the biggest percentage of currency in circulation.
However she urged the public, especially those buying currency on the street to check its authenticity and avoid loss through counterfeits. She said the central bank was conducting public awareness campaigns to teach the public the security features of genuine currency.
A Shs 1,000 coin?
Other BOU sources say the central bank will soon unveil the Shs 1,000 coin to mark the 50th independence anniversary. Senior official of the bank would not comment, but a source said; "Any time from now you will see the new coins." It is not clear whether the Shs 1,000 note will continue to circulate alongside the coins or be withdrawn.
Section 161 (1) of the Bank of Uganda Act (1993) mandates BOU as the only authority to issue Ugandan shilling currency as legal tender, a task it has carried out since 1966.
The currency now in circulation was issued in 1987 and 2010, in coins of Shs 50, 100, 200, and Shs 500, and notes of Shs 1,000, 2,000, 5,000, 10,000, 20,000 and Shs 50,000.