Two key financial services regulators have warned Kenyans against being hoodwinked by the mushrooming and unlicensed pyramid schemes.
Business Daily Africa reports that Central Bank of Kenya (CBK) and the Sacco Societies Regulatory Authority (Sasra) Kenyans should beware of investment schemes that promise quick returns but eventually rob them of their hard-earned money.
In a joint statement, the two agencies said: “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.”
“Such entities entice members of the public to place money with them and promise quick and abnormally high returns on their money or acquisition of non-existent properties,” it continued.
The watchdogs advised members of the public not to place their money with this club of unlicensed entities.
Instead, they admonished Kenyans to ensure they place funds with credible and duly licensed deposit taking institutions.
Kenyans are to confirm, from CBK and Sasra websites, the list of duly licensed deposit-taking institutions.
The get-rich quick scams are fraudulent operations that pay returns to separate investors from their own money or money paid by subsequent investors rather than from actual profits earned.
Investors are attracted to the schemes because they guarantee high returns over a short period of time.
Unfortunately these returns are not from the success of a real investment and are unsustainable.