The Bank of Namibia has classified the activities of Mufhiwa Building Projects as a pyramid scheme and cautioned the public not to participate in any transactions with the company. The central bank has also ordered promoters and participants of Mufhiwa Building Projects to stop with any and all business activities, noting that it has been attempting to contact the directors of the company for months. Following an investigation into Mufhiwa Building Projects’ business activities to determine if the Banking Institutions Act has been contravened, BoN’s assessment revealed that these constitute and resembles the characteristics of a pyramid scheme.
The Bank’s investigation showed that Mufhiwa Building Projects obtains money from the public by encouraging members and participants to recruit new members. Upon a payment of a joining fee of N$200, participants are promised payments to have their home loans settled, or to purchase new houses, or to renovate their existing houses.
“Mufhiwa Building Projects does not generate income through the sale of a product or any service to its members, and the joining fee of N$200 is used to pay existing members and the directors or owners of the scheme. Therefore, as soon as the recruitment of new members stops all the members and participants in the scheme will not receive any payment and will lose their joining fee,” reads the statement from BoN spokesperson Kazembire Zemburuka.
Zemburuka added that BoN calls upon and invites any director or duly authorised representative of Mufhiwa Building Projects to contact the Bank within a period of 14 days to disprove the findings of the assessment of the bank.
“Any director or duly authorised representative of Mufhiwa Building Projects shall be afforded an opportunity to make written and/or oral representations to the bank in order for the bank to consider the matter in terms of the provisions of the Act,” Zemburuka stated.
He concluded that failure by the directors or company representatives to make contact will result in the central bank’s decision being final.