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Is Nairobi a den of global fake currency cartels?

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Is Nairobi becoming hub for fake foreign cash printing firms?

Fake foreign cash
Fake foreign cash totalling Sh1 billion that was recovered at Sandalwood Apartments in Westlands, Nairobi, on October 1, 2018. Fake currency dealers are becoming bolder by the day. FILE PHOTO | NMG 

The large sums of fake foreign currency seized by the police in recent months have raised concerns on whether Nairobi could be turning into a base for transnational fake cash cartels.

The February 27 discovery of a cache of largely fake foreign cash amounting to Sh32 billion in a residential house in Ruiru town, 26km north-east of Nairobi, followed a series of similar cases in the past few years.

Ms Nancy Muthoni Muchori and Mr Joseph Munyao Kamandi were arrested in the operation by officers from the Special Crimes Prevention Unit, and are facing charges of “forgery, possession of papers of forgery and obtaining money by false pretence”.

The detention of the duo followed last October’s arrest and prosecution of a Chadian male national, his son and their Kenyan accomplice on suspicion of being in possession of about Sh1 billion in counterfeit dollars and euros — the latter used in 19 of the 28 members of the European Union.

The fake cash haul, which led to the arrest of Abdoulaye Tamba, his son Abdalla and their Kenyan driver Anthony Mwangangi, in upmarket Nairobi’s Westlands, added to the queue of foreigners arrested on allegations of dealing in counterfeit foreign money.

In June 2018, the High Court in Nairobi condemned a Niger and Cameroonian nationals to 10 years in jail for possession of an estimated Sh110 billion in counterfeit currency.

The two were also in possession of tools for making fake bank notes. The trial took two-and-a-half years, following the foreigners’ arrest in Nairobi’s Diamond Park II in 2016.

The two, Mohammed Sani from Niger and Cameroonian Ousman Ibrahim Bako, had been arrested after police found them with the fake dollar and euro notes, money printing machines, cutters, scanners, five safes, two computers, chemicals, masks and foil paper.

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Two other suspects were arrested at the Jomo Kenyatta International Airport (JKIA) in October 2016 with fake Sh267 million euro notes in 500 bills on their way to Dubai.

Inadequate information on the number of fake bank notes in circulation in Kenya, analysts say, makes it difficult to establish the impact it is having on the economy.

“When you look at where the money is being circulated…, that’s where things fall down in the Kenyan context. The problem is there has not been an in-depth study on what the value of fake cash is and how much is in circulation,” Patricia Rodrigues, an East African-based research analyst for London-headquartered consultancy, Control Risks, said in a recent interview.

The Central Bank of Kenya (CBK), the custodian of Kenyan money, said it does not usually comment on cases involving counterfeit foreign currency.

“We believe that the fake foreign currencies are not usually circulated in Kenya and we don’t comment on foreign currency because it’s not our money being counterfeited,” a director at CBK who did not wish to be named said.

Counterfeit bank notes remain a top form of fraud for the increasingly growing mobile money and bank agents in Kenya.

A survey by the CBK in June 2017 suggested 97 per cent of the fraud faced by mobile cash agents involved fake notes, especially the Sh1,000 and Sh500 notes.

The survey, based on 2015 data, showed that mobile agents, largely dealing in Safaricom’s M-Pesa, have become a key target for fake cash printing syndicates with 24,562 cases reported in that year.

Ms Rodrigues said Kenyan law enforcers are more focused on violent crimes such as robbery than white-collar crimes, making the vice take longer before being noticed.

“White-collar crimes don’t rank highly in an economy such as ours. There’s less of an investment in upgrading the investigative services for such crimes.

“There’s also perhaps collusion between the criminals and people within the law enforcement,” she said.

The CBK, in an annual report for the period ending June 2017, acknowledged the possibility of a transnational fake currency ring in Nairobi and the region.

“CBK and other East African Community (EAC) central banks held a joint meeting with the Eastern Africa Police Chiefs Cooperation Organisation (EAPCCO) in September 2016 to develop strategies for enhancing the fight against counterfeit crime, one of the emerging transnational crimes,” the CBK says in the report.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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