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BOZ warns of Microsavers Hub

THE Bank of Zambia has urged the public to be worry of a company trading as Microsavers Hub which is deemed to be providing unauthorised financial services.

 

In a statement yesterday, BoZ stated that information it had received suggested that Microsavers Hub was offering a financial service by collecting deposits from members of the public.

BoZ stated that its review of the business model of Microsavers Hub revealed that the company was in effect engaging in a ‘money circulating scheme,’ which was prohibited under Section 157 of the Banking and Financial Services Act.

 

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 the money circulation scheme.

 

BoZ stated that in view of the above, it, the Financial Intelligence Centre (FIC) and the Drug Enforcement Commission were collaborating to assess compliance of the activities of the company with the BFSA as well as the prohibition and prevention of money laundering Act, respectively.

 

It stated that a money circulation scheme was 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 organisation running the operation.

 

BoZ stated that the money circulation scheme usually entices new investors by offering higher returns than other legitimate investments which were usually in the form of short term returns.

It stated that perpetuation of high returns requires an ever – increasing flow of money from new investors to keep the scheme going.

 

BoZ stated that the schemes were of various forms but all promise high returns to individuals who were recruited by depositing money into an account after which they were issued with a purported investment document.

 

BoZ warned the public to desist from getting involved in such illicit activities.

 

It further advised the public to only deal with financial service providers licensed by BoZ, the Securities and Exchange Commission or the Pensions and Insurance Authority.

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