• September 20th, 2020

BoN bans yet another ‘pyramid scheme’



The Bank of Namibia (BoN) continues to ban dubious financial schemes operating in the country which, more often than not, prey on vulnerable Namibians during these tough economic times.
After an investigation into Global Green Network to determine whether the activities of the organisaton contravenes the legal provisions for banking institutions, the investigations revealed that the activities also contravene section 55A of the Banking Institutions Act, 1998 which is amended as Act No. 2 of 1998. The central bank’s spokesperson Kazembire Zemburuka said members of the public should cease participating in business activities of Global Green Network with immediate effect.

“The business activities of Global Green Network contravene section 55A of the Act. Therefore, the promoters of Global Green Network are hereby directed to cease the operations and promotion of this pyramid scheme forthwith. Failure to do so, the bank will take further appropriate action as stipulated in the Act,” explained Zemburuka.

The outcome of the investigation revealed that the network activities constitute a pyramid scheme in contravention of the Act because it does not offer any product for sale and their marketing strategy places emphasis on the recruitment of new members.

Zemburuka said the company features a referral system that encourages participants to continuously recruit new members to earn an income.
“After recruitment of members, there is a transfer or change of status of existing within the business structure. An existing member will move up the hierarchy and start to earn more commission as their down liners recruit more people. The commission is only earned upon the successful recruitment of new members.”
He noted that the main source of income for Global Green Network is derived from the payment of joining fees by new members with the promise of earning money upon the recruitment of new affiliates. He elaborated that as soon as the recruitment of new members ceases, the affiliates at the bottom of the structure will not be rewarded. The business model is thus not sustainable and will likely result in the public losing money, he said. He further urged the public to contact the central bank to get more clarity on the matter.

The central bank has been hard at work in trying to protect the Namibian community from losing their money through these schemes that have now become common in the country. The Bank of Namibia has declared several schemes illegal this year, like the Crowd1 Network Limited in February, R200 WhatsApp Stokvel in May, and the Elamant Company in July.
– mndjavera@nepc.com.na 
 


Maihapa Ndjavera
2020-09-03 09:20:23 | 17 days ago

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