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The Bank of Zambia (BoZ) has revealed that approximately K17.9 million had been lost to a fraudulent scheme this year.
From this money, only 8.2 percent is likely to be recovered as the operators of the scheme have most likely already used the funds.
This is according to the Central Bank Governor, Denny Kalyalya, at the commemoration of the 2023 world savings day held on Tuesday in Lusaka.
Kalyalya elaborated how members of the public fell prey to the fraudulent investment schemes.
“In most cases, the fraudulent investment schemes promise higher and quicker returns than those available on legitimate investment or savings products. In many cases, these schemes do not have any underlying business activity that can generate income to distribute to investors.
“What normally happens is that the promoters or organisers use much of the money they collect on personal expenses and then some money is paid to a few investors to create the impression that the scheme is capable of giving investors an irresistible return on sums invested,” he said.
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Kalyalya cautioned members of the public to be vigilant as they had much more power to stop these criminal enterprises altogether by simply stopping to deal with them.
“In recent years, the BoZ has observed a rise in the number of people that have fallen prey to money circulation scheme promoters and lost their hard-earned income thereby jeopardising their future.
“This development is troubling. Over the past five years, members of the public have lost a lot of money,” he said.
At the same function, Pensions and Insurance Authority (PIA) acting Registrar, Namakau Ntini, was pleased to see progressive movement to ensure financial inclusion in both the pensions and insurance spaces.
Ntini stated that the enactment of the insurance act no. 38 of 2021 opened up opportunities to grow the microinsurance space and therefore, opened opportunities for low-income earners in society to participate in insurance.
“With this act in place, the industry has more opportunities to increase insurance penetration on the market and positively change the insurance industry landscape by not only strengthening regulation and supervision, but ultimately contributing to the stability and growth of the Zambian financial sector,” she said.
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