Central Bank of Kenya warning against unlicensed deposit-taking entities and schemes

The Central Bank of Kenya (CBK) is warning members of the public about the re-emergence of unlicensed deposit-taking entities and Ponzi/pyramid schemes.

CBK and the Sacco Societies Regulatory Authority (SASRA) has sounded the alarm against unlicensed deposit-taking entities and Ponzi/pyramid schemes that entice members of the public to place money with them in return of quick and abnormally high returns.

“CBK and SASRA advise members of the public not to place their money with such unlicensed entities. CBK and SASRA are the sole licensing authorities for deposit-taking institutions in Kenya,” said a statement published on the CBK website.

CBK licenses commercial banks under the Banking Act, and microfinance banks under the Microfinance Act. SASRA licenses deposit-taking SACCOs under the SACCO Societies Act.

However, there are other cooperative societies registered by the Commissioner for Cooperative Development (CCD) to mobilize savings from their members and also provide credit facilities against the collateral of such savings. These are the non-deposit-taking SACCO Societies, which are governed by the Cooperative Societies Act. However, they are not authorized to take withdrawable deposits or present themselves to the public as deposit taking entities.

“Members of the public should exercise caution and ensure they place their funds with credible and duly licensed deposit-taking institutions. The list of licensed deposit-taking financial institutions can be obtained from CBK’s website www.centralbank.go,ke and SASRA’s website www.sasra.go.ke. Inquiries on the activities of all other cooperative societies or non–deposit-taking SACCOs should be directed to the office of the Commissioner for Cooperative Development or the nearest County/District Cooperative offices,” says CBK.

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