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Bank of Namibia cautions the public over Mufhiwa Building projects

The unemployed and low-income earners are usually lured by the promise of quick growth on a small cash outlay; encouraged to join a pyramid scheme with as little as N$200 and recruit additional members to the pyramid in the hope of owning a house.

The Bank of Namibia warned the public to not fall victim to this mushrooming “Housing Project”. What we know about people who start pyramid schemes is that they take their time studying the environment to identify their potential victims. They follow them around, learn their habits and understand their routines and needs; when all is in place, they befriend them.

Bank of Namibia however, warns the nation about the dangers of this trending scheme urging the public to not participate in this scheme as by doing so contravenes section 55A of the Act, and hence cautioning promoters and directors of this scheme to stop.

Mufhiwa is a life-changing project that gives members chances to own houses, allowing members to join with a fee of N$200 and invite other 2 persons to do the same. After recruiting, they then earn cash in every stage which qualifies them for a house in the second stage.

According to the recent investigations by BoN, Mufhiwa does not generate income through the sale of a product or service to its members. BoN also learned that the joining fee of N$200 is used to pay existing members and directors or owners of the scheme.

The risk in this is that, as soon as the recruitment of new members’ stops, all the members and participants in the scheme will not receive any payment therefore resulting in losing their joining fee. It looks like these schemes all have something in common “pressure to recruit additional members” and this should be a warning sign.

BoN has since tried to get hold of Mufhiwa Building Project directors but they did not avail themselves. BoN has given them, (Mufhiwa Building Project directors) 14 days from now to make their condemnatory statement towards findings from BoN’s investigations, warning that failure to do so within the 14 days’ time will result in the bank’s position to be endorsed as final.

(Source: BoN press release)

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