Bank of Uganda shares tips on how to identify Ponzi or pyramid schemes

It is estimated that the victims lost over sh1 billion in a period of three years.

It is alleged that between the years 2021 and 2023, Capital Chicken operated an office along Kanjokya Street in Kampala Central Division, where individuals entrusted their money for investment with the promise of returns.

According to the Police, this operation appeared to run smoothly, but recently, concerns arose as some members encountered unusual behaviour from the management. Reports indicated that members were being asked to "come back later" when visiting the office for transactions.

On September 29, 2023, the situation escalated when individuals arrived at the office to find it unexpectedly closed. In light of these developments, concerned citizens promptly reported the matter to the police.

The Bank of Uganda has now shared tips on how one can identify a ponzi or pyramid scheme. These include;

The investment guarantees high returns and shows little risk of loss. It sounds too good to be true.
Promises consistent returns despite market conditions. Legitimate businesses usually experience times of loss and profit.
The investment strategies or business activities are described as too complex for the investor to understand or top secret. If the business cannot be explained, then it is a scam.
The company or proprietor focuses on getting new clients or investors. Without a consistent flow of investments to provide returns to investors, the scheme falls apart.
Both old and new investors face difficulties removing their money from the scheme.