The Bank of Zambia has warned members of the public to beware of a company trading as Microsavers Hub, which the Central Bank says it is providing unauthorised financial services in Zambia.
The Bank of Zambia says the conduct of Microsavers Hub is in contravention of Section 6(2) of the Banking and Financial Services Act No. 7 of 2017 (BFSA). It says information received by the Central Bank suggests that Microsavers Hub is offering a financial service by collecting deposits from members of the public.
“BoZ’s review of the business model of Microsavers Hub has revealed that the company is in effect engaging in a ‘money circulation scheme,’ which is prohibited under Section 157 of the BFSA. According to Section 157 of the BFSA, “a person shall not -(a) Conduct, or participate in, a money circulation scheme; (b) Or issue a notice, circular, prospectus, proposal or other document inviting the public to subscribe to a money circulation scheme.”
The Bank of Zambia says it is now collaborating with the Financial Intelligence Centre (FIC) and the Drug Enforcement Commission to assess compliance of the activities of the company with the BFSA as well as the Prohibition and Prevention of Money Laundering Act, respectively.
“A money circulation scheme is an unsustainable investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation,” it warned.
It added, “the money circulation scheme usually entices new investors by offering higher returns than other legitimate investments, which are usually in the form of short-term returns. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going. The schemes are of various forms, but all promise high returns to individuals who are recruited by depositing money into an account after which they are issued with a purported investment document.”
“The public is warned to desist from getting involved in such illicit activities and is urged to be cautious with any investment that promises huge returns without underlying economic activity. Further, the public is advised to only deal with financial service providers licensed by the BOZ, the Securities and Exchange Commission or the Pensions and Insurance Authority.”
institutions licensed by boz by boz are increasingly turning out to be more fraudulent in their dealings it’s like they’ve gotten out of control. customers seem to have nowhere to run. both boz and insurance authority need to up their game unless they’re part of the scams
Unfortunately, the majority of affected and target of these frauds do not have access to this warning by BOZ
BOZ: How much interest is AB Bank charging on loans given to their customers (from markets)
Compared to the interest they charge us when we get loans from them. The banks in Zambia still from their clients. You can’t blame the people if they have discovered better alternatives.
BOZ should work on interest rate in Zambia that banks and financial services are offering,its too expensive.when they borrow from an individual they offer 2% but if they are lending me is 25% and 50%.thats why people are lending bitcoins
Why should i invest money In a bank which by the end of 365 days it will give me 4-8% interest. Instead of me investing where my money will be quadrupled. Come on, you are scared of losing investors?.