NBFIRA suspends ZCC Kganya “money laundering” scheme


After advising members of the Zion Christian Church to report their money laundering complaints against Kganya Insurance scheme administrators early this year, the Non -Bank Financial Institutions Regulatory Authority (NBFIRA) has now taken a firm stance and ordered administrators to discontinue the controversial scheme.
The decision by the insurance regulator was made, reportedly, in response to several financial advisory bodies and intelligence agencies that advised and called for the protection of the unsuspecting members. The suspension letter from NBFIRA has directed that the insurance scheme normalise itself following investigations that it was not properly registered.
NBFIRA in a letter dated February 6th, 2018 signed by the director of insurance, Matlakala Raphaka washed its hands of the matter, advising the general membership of the church to report the anomalies to law enforcement agencies.
In a letter copied to the Ministry of Finance and Registrar of Societies, NBFIRA director of Insurance, Matlakala Raphaka says their investigations have revealed that the ZCC insurance scheme is not registered with them and therefore not authorised by NBFIRA.
In Botswana, insurance agents are required to undergo extensive training for the type of insurance they are qualifying for to be approved, as well as to take the state insurance exam (Certificate Of Proficiency).
After successfully completing the exam an insurance agent will need to apply to NBFIRA to be licensed as an agent. Only licensed insurance agents are allowed to sell and service insurance policies.
The Kganya insurance scheme covers burials, accident cover, permanent disability, dreaded disease cover and subsidised fares at half price called ‘Leeto la Moria; on three pilgrimages to Moria.
The scheme administrator, Paradise Lemogang declined to comment on the matter saying its best this publication addresses the questions to the church headquarters in Moria. Raphaka did not accede to an interview request by this publication demanding that she be sent a list of questions to respond to.
In the interim all branches of the church have been informed to stop subscriptions until the noncompliance has been rectified.
Where it all began…
Question over the legality of the insurance scheme turned ugly when members of the church wrote a letter to NBFIRA enquiring on the legality and legitimacy of Kganya insurance scheme, which they have been contributing P75.00 towards since 1990. Given the size of the Church’s following and the numbers and years they have been contributing, the scheme is among the most moneyed not only in the country but region.
In their five-page letter to NBFIRA, the members reported that there are signs of money laundering at the church’s biggest insurance scheme:
“We gather that monthly collections towards Kganya Insurance Scheme from some of our unsuspecting and gullible members are being diverted and put for personal use, with some deposited into some illicit accounts with one local bank,” reads the appeal letter to NBFIRA.
The church members warn that “with the abrupt, illegal and callous stoppage of the regular payment of Kganya monthly premiums, our members’ good standing has been prejudiced such that they may lose out on burial cover and other associated benefits. With this stand-off, no new members can register for this insurance scheme.”
The concerned members are so angry that they are demanding their subscriptions from the day of the scheme’s inception in 1990. “Given the view that Kganya group was never intended to be a pyramid scheme, we contend that our members, whose regular monthly premiums have been curtailed, ought to and must be reimbursed, with compound interests, for all their contributions that they made toward the scheme, where we have been members since its inception in 1990 until 30 September 2017, when our subscriptions were suspended haphazardly and without formal notice,” charged the Gwest Phase Two members.
“Our church members have been contributing towards this scheme religiously since inception in 1990 and subsequently its roll out to Botswana, until 30th September 2017 when our contributions were suspended under dubious circumstances by Kganya Botswana at the instigation of a grouping called the Consensus Building and Mediation Team,” reads the letter to NBFIRA.