Warning Against Dangerous “Luholiswane” Schemes Masquerading as Group Savings in Swaziland

The Central Bank of Swaziland (CBE), Financial Services Regulatory Authority (FSRA), and Royal Swaziland Police Services (REPS) have issued a stern warning to the public against the rising trend of individuals engaging in allegedly harmless group savings schemes, also known as “luholiswane,” through social media platforms.

Concerns Raised by Financial Regulators and Law Enforcement Agencies

According to reports, these schemes do not conform to the legal stipulations of legitimate group savings as outlined in the Consumer Credit Act of 2016. Instead, they resemble the illegal and long-outlawed pyramid schemes in Swaziland – a clear violation of the law. One such scheme that has rapidly spread is “WhatsApp Gifting.”

Risks Associated with Pyramid Schemes

The financial regulators and law enforcement agencies have expressed concern that these pyramid schemes are predatory in nature and solely reliant on public recruitment, rather than genuine savings or investment principles. Given the difficult financial situation in Swaziland caused by the COVID-19 pandemic, members of the public have grown increasingly vulnerable to such financial pitfalls. All forms of pyramid schemes are not sustainable and inherently unsound business models, often leading to financial distress and broken relationships.

Preventative Measures

To prevent this, the CBE, FSRA, and REPS urge the public to exercise caution and only engage in financial transactions with authorized financial services providers. Promoters of pyramid schemes, including those behind “WhatsApp Gifting” and other related initiatives, are strongly advised to cease such practices immediately. Any attempt to lure others into these schemes, directly or indirectly, is a violation of the law.

Reporting Suspected Activity

Members of the public are encouraged to report any suspected activity to the Royal Swaziland Police Services by dialing 999 or 9999. All reported information will be handled with utmost confidentiality.

Contacting Financial Regulators for Inquiries

For inquiries related to licensed financial entities, residents are invited to contact the Central Bank of Swaziland at 2408 2000 or the FSRA at 2406 8000.

Cautionary Reminder

A reminder to Swaziland citizens: if an offer seems too good to be true, it probably is. Stay safe!