A statement released yesterday the financial sector regulator cautioned borrowers not to transact business with unlicenced institutions lest they lose their hard-earned money to con artists.
The statement cited one such company as named VICOBA Foundation which the regulator said has been using the names of top national leaders namely President John Magufuli, Vice President Samia Suluhu Hassan and Prime Minister Kassim Majaliwa to win the trust of unsuspecting clients.
The said companies have been operating mainly online, enticing unsuspecting people with sweet deals of loans but at a fee.
VICOBA Foundation has been promoting itself as offering loans of up to two million shillings and ten million shillings but requires applicants to pay a fee of between 200,000/- and 500,000/-, the statement indicated.
Additionally, to entice clients, this institution has been telling the public that it is owned by the government, which is false, it affirmed.
The BoT said preliminary investigations had established that the company which uses names of top national leaders to win the trust of applicants and the wider public does not even have a registered office.
The proprietor of the firm has already been arrested and was being interrogated for legal action, it elaborated.
“As the regulator of the financial sector, including VICOBA (Village Community Banks), the BoT would like to caution members of the public not to get involved with institutions like this - to avoid loss of their money,” the statement intoned.
It also warned individuals or institutions that receive deposits or issues loans without proper and valid licences to stop immediately or risk arrest and arraigning in court.
The statement reiterated that section 6 (1) of the Banking and Financial Sector Act of 2006 forbids individuals and companies from engaging in the business of receiving deposits and lending money without due licences.
“Individuals, companies and groups that engaged in receiving deposits and issuance of loans before November 1, 2019 are required to apply for business licence with the BoT before October 31, 2020 without fail,” it added.