NAIROBI (Xinhua) --
The Central Bank of Kenya on Friday
warned of pyramid schemes in the country masquerading as savings
and credit societies.
The entities are taking cash from
the public by asking them to save or invest with them so that
they can get higher interest or buy houses/land only to go under
after few months.
At least three such outfits have been reported to have
collapsed with members’ money since the beginning of the year
leaving many distraught.
"The Central Bank of Kenya (CBK) and the Sacco Societies
Regulatory Authority (Sasra) wish to draw the attention of
members of the public to the re-emergence of unlicensed
deposit-taking entities and Ponzi/pyramid schemes," said the CBK
in a statement Friday.
The regulator noted that the entities were asking citizens to
invest with them, promising quick and abnormally high returns on
their money or acquisition of non-existent properties.
"Members of the public should exercise caution and ensure
they place their funds with credible and duly licensed
"The list of licensed deposit-taking financial institutions
can be obtained from CBK’s website," said the bank.
Kenyans have a long and bad history with Ponzi schemes, which
over five years ago swindled citizens reportedly 800 million
U.S. dollars, which to date has not been recovered.
The losses destroyed families and led to several deaths as
some people invested their lifetime savings or gratuity after
Analysts noted that while Kenya has a vibrant financial
sector, there are thousands of many people who cannot access
financial services making them vulnerable to such schemes.
Besides that, citizens are conned due to desire for quick