KENYA: Beware of saving scams, churches warn

By Fredrick Nzwili, June 29, 2007 [Ecumenical News International] Get-rich-quick saving schemes are mushrooming in Kenya, and church leaders have joined the government in warning people against putting their earnings into these accounts because their promise of high returns is unrealistic.

"Kenyans be warned, the schemes are fraudulent and dishonest," Anglican Bishop Gideon Ireri of Mbeere, who heads the Churches' Peace and Justice Commission, said in an interview with Ecumenical News International on June 27.

Many Kenyans are said to be investing their money in the schemes, which are reported to be popular with Christian clubs, and Pentecostal and evangelical church members.

Individuals or companies run the scams, sometimes called pyramid schemes, and recruit investors with an offer of guaranteed high returns. Those who invest first do receive a high rate of return on their money but these gains are paid for by later recruits, and do not represent a return on any real investment.

Bishop Ireri said only a few people benefited from the schemes, while those who had been tricked into giving up their savings were ending up in counseling centers because of depression.

Through warnings from the central bank, the government has told citizens to avoid the schemes. Kenya's Betting Control and Licensing Board says they are illegal.

The schemes began sprouting up about two years ago, and promised to double an investor's money within weeks or months. The schemes attracted deposits from Kenyans of all social groups. Now, many investors have already lost their money.

"We have discussed how these schemes are taking our people in the wrong direction," said Bishop Isaiah Deye, the conference secretary of the Methodist Church of Kenya.

The Rev. Maloba Wesoga, the administrator of Nairobi's Roman Catholic archdiocese, urged the authorities to ensure that savers could have their money refunded if the schemes collapsed.

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