Hawkers, boda boda riders in Kirinyaga fall prey to pyramid scheme

Traders in Kirinyaga County, among them hawkers and boda boda riders, have lost Sh10.8 million to conmen who lured them to a pyramid scheme with promises of quick riches.

The organisation dubbed Small Traders Initiative and Empowerment Programme opened its offices in the fast growing Ngurubani town in January this year, and wooed traders claiming they were a microfinance firm out to assist them expand their businesses and grow profits.

Victims of the fraud scheme said they were asked to register as members with Sh150 each and to continue saving a minimum of Sh200 daily.

Three hundred traders signed up and saved daily for the last six months until the group closed offices without notice and the staff disappeared with their money.

"We were told that we will be offered loans three times the money we have invested with an interest of one per cent. We were convinced and saw the deal was good and started saving with them. Shockingly, after six months we went to their offices only to find them locked," said Mr Stephen Kioko, a boda boda rider.

Some of the traders have lost as much as Sh30, 000 to the fraud scheme.

Mr Kioko, who wanted to buy a new motorcycle said he lost Sh25,000 to the scheme.

"I gave all the money that I had, and now I have been reduced to a pauper," lamented Mr Kioko.

Forty-year-old Josphat Njoroge, who hawks sausages and eggs, forked out Sh24,000 hoping to get Sh72,000 loan only to be left high and dry after six months of saving.

Mr Evans Kamau, 26, said that after he had saved Sh26,000 he approached the firm asking for a loan to shore up his failing business but the organisation seemed reluctant, raising his suspicions.

"They were adamant saying I must wait until they advance the loan to me. I sensed danger and insisted that I must get money to boost my business and they agreed," he said.

Mr Kamau said he continued cooperating with the officials although he was suspicious, adding that he was shocked when he learnt that they had closed offices and disappeared.

Luckily for him, when the officials unceremoniously left they had only Sh3,000 belonging to him.

"If I had not withdrawn the money, I would have lost more cash to the scheme which told us (that they) had branches in major towns across Kenya," said Mr Kamau.

The victims want the fraudsters pursued and prosecuted for preying on them.

Mwea East criminal investigations officer, Mr Boaz Obeto admitted that the traders had lost the cash amounting to millions of shillings to the pyramid scheme.

"The organisation was a pyramid scheme similar to Deci and we are investigating it. The officials of the scheme have gone underground and we are looking for them for questioning and prosecution," said Mr Obeto.

Mr Obeto said the victims have reported the matter to his office and recorded statements.

"This is a very grave matter and we have commenced investigations," he said.

Efforts to reach one of the officials of the scheme identified by the victims as Mr James Matemo were unsuccessful as his phone has been switched off.

(Editing by Joel Muinde)