Ponzi schemes is a form of fraud in which investors invest in a non-existent company which promised then a ridiculous percentage on investment returns. In order to build the scheme to a substantial clientele, they pay earlier investors using funds from new investors. Thus word spreads and they entrap more victims. Simply put, it’s all one big lie!

In efforts to win over the people, these fraudulent companies start off with goodwill activities and donations to the less privileged in the communities they operate. Also they target areas that are far away from the main regulatory institutions, so they avoid big cities and town. Most of these investment companies operating Ponzi schemes are located in the Western, Upper East, Brong Ahafo and Upper West regions.

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All these Ponzi schemes in Ghana promised their investors an investment rate of not less than 50 %. As in the case of DKM Diamond Microfinance, they promised investors a 60% investment return within a period of two months.

Aside loss of money, lives are also ruined. It was reported that about 50 people in the Brong Ahafo region committed suicide after they realized they had been scammed.

Characteristics of a Ponzi scheme

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Some Ponzi Schemes in Ghana

Measures which could be put in place

  • microfinance and investment companies