THE public should desist from getting involved in money circulation schemes that promises huge returns without underlying economic activity, the Bank of Zambia (BoZ) has warned.

This is according to the BoZ communications team statement issued yesterday.

BoZ has warned the public not to deal with Microsavers Hub, a firm which was providing unauthorized financial services.

This is in contravention of Section 6(2) of the Banking and Financial Services Act No.7 of 2017 (BFSA).

Microsavers Hub, the BoZ said, was offering a financial service by collecting deposits from members of the public.

BoZ’s review of the business model of Microwaves Hub revealed that the company was in effect engaging in a ‘money circulation scheme,’ which is prohibited under Section 157 of the BFSA.

A money circulation scheme is an unsustainable investment operation that pays returns to investors from their own money or the money paid by subsequent investors, rather than profit earned by the individual or organisation running the operation.

In view of the above, the BoZ said, the Financial Intelligence Centre (FIC) and the Drug Enforcement Commission (DEC) were collaborating to assess compliance activities.

“The Bank of Zambia wishes to warn members of the public to beware of a company trading as Microsavers Hub, which we deem to be providing unauthorized financial services in contravention of Section 6(2) of the Banking and Financial Services Act No.7 of 2017(BFSA),” the BoZ said.

The BoZ has urged the public to only deal with financial service providers licensed by the authority, the Securities and Exchange Commission or the Pensions and Insurance Authority.