CBK & Sacco Regulator have Warned the Public Against Unlicensed SACCOs & Ponzi Schemes

The Central Bank of Kenya (CBK) and the Sacco Societies Regulatory Authority (SASRA) have warned the public against investing with unlicensed deposit taking entities and ponzi/pyramid schemes which have been promising Kenyans unusually high returns or acquisition of non-existent properties.

“The CBK and SASRA wish to draw the attention of members of the public to the re-emergence of unlicensed deposit taking entities and ponzi/pyramid schemes….CBK and SASRA advise members of the public not to place their money with such unlicensed entities.” the two regulators said in a joint statement.

The warning comes after two firms, Gakuyo Real Estate and Simple Homes were recently exposed after they collected money from the public and in return did not deliver the homes promised to clients.

Ekeza Sacco which is associated with Gakuyo Real estate firm had signed up to 7,000 Kenyanswho had contributed more than Sh 3.0 Billion, but when members turned up to collect keys for their houses, they were told the homes weren’t ready and even the acquisition of land meant for construction of the project had not taken off.

On the other hand, Simple Homes Housing Co-operative which was launched in late 2015 had promised its members affordable mortgages on property across the country. Few weeks ago, the company shut down its operations including all its online presence and members who had paid up millions in upfront deposits were left stranded.

SASRA also noted that Saccos registered with the commissioner of Cooperative Development are not allowed to take withdrawable deposits or present themselves to the public as deposit taking entities.

Source: CBK