Money Week spot­lights il­le­gal schemes

Lesotho Times - - Business - Bereng Mpaki

THE Cen­tral Bank of Le­sotho has un­der­scored the need for fi­nan­cial ed­u­ca­tion to pro­tect the in­tegrity of the coun­try’s fi­nan­cial sec­tor from the chal­lenges posed by crim­i­nals.

Act­ing Cen­tral Bank Gover­nor Dr Masilo Makhetha made the call this week dur­ing the launch of the 2016 Money Week cam­paign in Maseru.

He iden­ti­fied the de­posit­ing of coun­ter­feit money into mo­bile money plat­forms and the pro­lif­er­a­tion of il­le­gal in­vest­ment schemes as ma­jor chal­lenges be­set­ting the coun­try, adding there was need for fi­nan­cial lit­er­acy and in­clu­sion to mit­i­gate their neg­a­tive ef­fects on the coun­try’s econ­omy.

Now in its fifth year, the two-week cam­paign, which is held in col­lab­o­ra­tion with fi­nan­cial in­sti­tu­tions and other part­ners, is aimed at pro­mot­ing knowl­edge and skill of han­dling fi­nan­cial is­sues by the pop­u­lace and en­sur­ing they are in­cluded in the fi­nan­cial sys­tem.

Held un­der the theme “Take Part, Save Smart,” this year’s cam­paign seeks to raise fi­nan­cial aware­ness through var­i­ous in­ter­ac­tive ac­tiv­i­ties tar­get­ing dif­fer­ent sec­tors of so­ci­ety.

The ac­tiv­i­ties in­clude school com­pe­ti­tions on fi­nan­cial mat­ters, dis­sem­i­na­tion of mes­sages through mass me­dia and round ta­ble dis­cus­sions among stake­hold­ers.

“The 2016 cam­paign held un­der the ‘Take Part, Save Smart’ theme comes at an op­por­tune time when we are liv­ing in an era char­ac­terised by an un­for­tu­nate emerg­ing trend where crim­i­nals take ad­van­tage of the ig­no­rance of some mem­bers of the pub­lic about fi­nan­cial is­sues,” Dr Makhetha said.

“No­tably, this cam­paign, un­der the above­men­tioned theme, comes at an op­por­tune mo­ment when crim­i­nals are out to de­fraud the pub­lic of their hard earned fi­nan­cial re­sources. For in­stance, there are reported cases of at­tempts to de­posit coun­ter­feit cur­rency into mo­bile money ac­counts at some agents’ stores and sub­se­quently with­draw­ing good money from other agents’ stores. In case where this is suc­cess­fully ex­e­cuted, agents do lose money,” Dr Makhetha said.

He said the sec­ond group of crim­i­nals pro­moted il­le­gal in­vest­ment schemes in­tended to de­fraud the pub­lic by lur­ing them with a prom­ise to re­pay their money at very high rates of re­turn such as pyra­mid and other money cir­cu­la­tion schemes.

“The most com­mon fi­nan­cial crime comes in the form of il­le­gal in­vest­ment schemes, which prom­ise ex­ces­sively high re­turns to at­tract un­sus­pect­ing in­vestors; and then de­fraud them of their sav­ings. There­fore, I would like to take this op­por­tu­nity to, once again, warn mem­bers of the pub­lic that these ac­tiv­i­ties are not only il­le­gal, they are de­signed to de­ceive. “Fore­warned is fore­armed”, don’t fall vic­tims. (I know temp­ta­tion can some­times be high, h, say NO!), NO!),” he added.

Dr Makhetha in­di­cated the scams had the fol­low­ing ing char­ac­ter­is­tics which made it pos­si­ble for or an in­formed pub­lic to iden­tify them:

They are not li­censed to op­er­ate in Le­sotho;

They prom­ise un­usu­ally high re­turns;

Their un­der­ly­ing prod­uct is un­clear;

The man­ner in which they are ad­min­is­tered is com­pli­cated;

Their iden­tity in terms of own­er­ship,ner­ship, phys­i­cal ad­dress, and fi­nan­cial details are usu­al­lyually ob­scure;

Their trans­ac­tions do not of­fer any le­git­i­mate doc­u­men­ta­tion in the form of share cer­tifi­cate that gives the trans­ac­tion le­gal stand- ing; and

Any other details that sug­gest that the en­tity is questionable. “In light of this, I would there­fore take this op­por­tu­nity to once again alert mem­bers of the pub­lic that these ac­tiv­i­ties are il­le­gal and neg­a­tively af­fect the econ­omy,” he said. The act­ing gover­nor said it was in the gen­eral pub­lic’s in­ter­est to “save smart” by deal­ing ex­clu­sively with li­censed fi­nan­cial in­sti­tu­tions and de­sist from in­vest­ing in il­le­gal en­ti­ties such as pyra­mid schemes and other money cir­cu­la­tion schemes. For his part, Stan­dard Le­sotho Bank Chief Ex­ec­u­tive Mpho Vum­bukani said the Money Week also helped cre­ate pub­lic aware­ness on the fi­nan­cial ser­vices of­fered by dif­fer­ent fi­nan­cial in­sti­tu­tions in the coun­try. “Know­ing what fi­nan­cial ser­vices are avail­able for the peo­ple makes it eas­ier for them to make in­formed calls on their fi­nan­cial mat­ters,” Mr Vum­bukani said.

Act­ing cen­tral Bank gover­nor Dr Masilo Makhetha.

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