CBK Sounds Alarm on Ponzi/Pyramid Schemes in Kenya

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The Kenyan public has been warned about the re-emergence of unlicensed deposit-taking entities and Ponzi/pyramid schemes which entice people to deposit money with them with the promise of quick and abnormally high returns or acquisition of non-existent property.

These fraudulent investment operations which pay returns to investors from new capital paid to them by new investors rather than from legitimately earned profit had taken the country by storm a few years ago resulting to the loss millions of hard-earned shillings.

The Central Bank of Kenya (CBK) and the Sacco Societies Regulatory Authority (SASRA) have announced that they are the sole licensing authorities for deposit-taking institutions in Kenya; the CBK of commercial and microfinance banks; and SASRA of deposit-taking savings and credit cooperatives organizations (Saccos).

Kenyans have been adviced to confirm if they are placing their funds with credible institutions from a list of licensed deposit-taking financial institutions from the CBK and SASRA websites.

Though there are other cooperative societies registered by the Commissioner for Cooperative Development (CCD) to mobilize savings and provide credit facilities against the collateral of such savings, they are not authorized to take withdrawable deposits or present themselves as deposit-taking entities.

“Inquiries should be directed to the office of the CCD or the nearest County/District Cooperative offices,” the two institutions jointly say.

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