The Bank of Namibia has said members of the public should stop participating in the R200 WhatsApp Stokvel with immediate effect, or risk being fined N$1 million or sent to jail, or both.
This was said by the bank's communications director, Emma Haiyambo, on Wednesday afternoon.
Haiyambo gave the warning with the release of the findings of an investigation by the central bank of the WhatsApp Stokvel money-making scheme. The bank stated it has found the R200 WhatsApp Stokvel fits the characteristics of a pyramid scheme.
Haiyambo said a pyramid scheme is a contravention of banking laws, which forbid individuals and institutions from running such financial set-ups.
She also said the WhatsApp Stokvel qualifies as a pyramid scheme because participants in the scheme are asked to recruit new members to become eligible to earn the promised income, and that the scheme does not generate income through the sale of a product or service to participants, but rather has a joining fee as the only source of income.
Haiyambo warned that the promoters of the scheme should stop immediately.
"The promoters of the R200 WhatsApp Stokvel are hereby directed to cease the operations and promotion of this pyramid scheme immediately. Failure to do so, the bank will take further appropriate actions," she said.
Members of the public are also asked to stop participating in the scheme and those who choose to continue to participate could be fined up to N$1 million or receive a prison term of up to 10 years, should they be found guilty.
For further information, Haiyambo said, members of the public are encouraged to contact the Bank of Namibia.