MASERU —  Members of the Public have been urged to understand how legitimate investments work and seek advice from the Central Bank of Lesotho (CBL) before joining pyramid schemes or engaging in betting.

This was said by the National University of Lesotho Lecturer Department of Economics, Mr. Rorisang Lesoana in an interview with the Agency, a few days after the majority of Basotho who invested their money in the SGK investment scheme failed to make withdrawals thus lost all their money.

He encouraged people to study how investment schemes operate before investing their money, warning that investment offers promising returns of 20 percent or more are unrealistic as they normally range between five percent and nine percent in legitimate financial institutions.

"Pyramid schemes and betting cannot solve poverty or financial hardships," he stressed, expressing concern that some people even take out loans to invest in such schemes. 

Despite the collapse of SGK investment scheme, some investors said they would continue joing similar schemes due to continuing economic meltdown and high rate of unemployment.

One Mr. Takalimane Mohale said he had been receiving returns for quite a long time and will still join pyramid schemes despite CBL's warnings.

On the other hand, Mrs. Malesenyeho Kolehile said she regretted joining SGK after being persuaded by a friend, even though she suspected the scheme might collapse.

Meanwhile, the Central Bank of Lesotho issued a statement last month warning members of the public about the growing number of individuals and illegal investment platforms that promise unusually high returns or solicit deposits from potential investors.

It warned the public not to invest in the SGK investment scheme, Prestige Wealth investments, Lengau People Society and Prime Aura Platform under the false belief that they are licensed by CBL.

It also encouraged that before participating or investing any money in these schemes, the public should demand proof of a valid license issued by CBL and verify the license validity directly with CBL