Staff Writer
The Bank of Namibia (BoN) says it is still investigating whether the trending WhatsApp Stokvel are legal under the existing country’s banking laws.
This comes as Namibians have been joining the stokvels as a means of making additional income under the harsh economic conditions persisting in the country.
“Recently, the Bank has picked up a trending WhatsApp Stokvel, which it is assessing to determine whether it is permissible under the relevant provisions of the Banking Institutions Act of 1998, as amended,” BoN’s Deputy Director: Corporate Communications, Kazembire Zemburuka told the Windhoek Observer.
He said the current laws does not specifically prevent Stokvels provided that their membership do not exceed 20 persons, the amount collected from members does not exceed N$500,000, and those running them do not solicit or advertise for deposits. Nevertheless, members of the public should be careful when participating in such schemes.
“One needs to distinguish cooperative saving schemes (Stokvel) which are legal, and an illegal financial scheme such as a pyramid scheme.
“Stokvels are typically more like clubs, where a group of friends or a group of people come together with a common objective and decide informally to pool their money to the benefit for all members of the said club. Quite often members would go to a bank and open up a banking account, if they are able to, or use the money to buy groceries, or just collect it, and each month they would take out the money,” Zemburuka said.
“The Bank cautions members of the public, once again, to be vigilant that any financial scheme that is primarily based on soliciting or advertises for deposits or the recruitment of members, and/or the payment of joining fees may lend itself to an illegal financial scheme structured to deceive the public.”
He, however, said BoN will not be able to provide any remedies to any aggrieved members of the public regarding their participation in any such scheme.
“Unfortunately, the Bank cannot help members of the public who might have fallen victim to money making gambits. The public is urged to break off contact immediately and stop investing their money.”
According to Sanlam, South Africa’s stokvel economy, where each month or week, members will contribute an agreed amount and at the end of the year then share the savings with their members or collectively buy items that will be shared by the members, is worth about N$50 billion annually with more than 800 stokvels operating across the country.
The warning by BoN comes after it last year declared Longrich Bioscience illegal. After conducting an investigation into the operations of the business, it was found that the core activities of the business involved the recruitment of members at a fee.
The apex bank last year also declared Karatbars International, an online company that claimed to specialize in the sale of small gold bars, an illegal pyramid scheme.
Bitcoin is also not recognized by BoN.
