Interesting post. I am a collector of Kenyan banknotes and have been collecting them for the past 5 years. Banknote collecting (or notaphily) has taken on a new investment dimension and you would be surprised at the prices I've had to pay for some of the notes I have in my collection.
A quick starting guide for the ardent collector should be the Krause Standard Catalog of World Paper Money, which you can "find" online. This will help you understand the different banknotes, their features and an indication of their value. In the past this was considered the de facto standard and authority on all matters banknote-related. Of course it has its limitations (including minor omissions) but it's an excellent starting point.
The single most important factor in currency collection is the condition of the banknote, which, in my experience when searching for notes in Kenya, has been a major hurdle. You ask someone for a banknote and they tell you that they have a "new" Jomo Kenyatta 20 shillings note - only to find that it has been folded at least once.
For someone seriously considering starting out on the notaphily journey, I would recommend splitting your collection into pre-independence (1905-1963) and post-independence (1964-2010) banknotes. The latter are far less-frustrating though by no means easier to collect (try locating a 1987 200 shillings banknote in mint condition!). I would also encourage you to invest in a decent album or system by which you can store your notes safely and away from light as they fade when exposed to light over long periods of time - hence the colour variations you may see in the same notes. You should also seriously consider investing in the security of your banknotes - the last thing you want is your maid stealing your hard acquired collection. I would also be careful not to talk to too many people about your collection purely because of the value plus the fact that the current constitution makes it illegal to trade currency.
East African Currency Board notes are a whole different ball game. They are very difficult to locate in mint (uncirculated = UNC) condition and command ridiculous prices when they appear. It would be prudent to acquire these in any condition that you can find and then improve on them over time. Some are virtually unobtainable, such as the KGV 200/= note of which there are only 13 known pieces in the world. The KGV and KGVI 10,000/= notes are for all intents and purposes unobtainable... but nothing surely beats the East African Currency Board Rupee uniface notes for sheer value and elusiveness. These notes easily go for over KES 800K in any condition. They surface only at auctions and are always listed as "extremely rare".
I have specifically restricted my collection to banknotes (over coins) and know a few people who have entire collections of Kenyan notes and coins. Be advised that this is a hobby that requires a lot of investment of both time and money, but is well worth the hobby in the long term. For instance, the first issue 1,000/= (1994) banknote goes for nothing less than $100 in UNC condition today. Of course this is perceived collectors' premium and only constitutes actual return once a transaction has been concluded. However, it is good to remember that CBK destroys old notes and withdraws notes from circulation once a new issue comes out. This makes old currency a particularly attractive investment.
I could go on for hours and I'd be happy to offer more advice but I have to stop. If I were to offer 4 banknotes that someone should collect today (in case they didn't want to invest in an entire collection), I would recommend the following (they have to be in mint UNC condition):
- 1966 50 shillings (present value >KES 100,000)
- 1994 1,000 shillings (~KES 8,500)
- 1987 & 1988 200 shillings (~KES 15,000)
- 1988 500 shillings (~KES 15,000)
- 1996 20 shillings and 50 shillings notes (both of these were issued in 2 types distinguished by the colour of the signatures. Collect the ones with the black signature as they only appeared in a single serial number series)
Happy hunting!