An operation which calls itself KWD Digital Marketing has shut down amid a combined RBZ and ZRP investigation. KWD is being investigated for contravening the Banking Act by offering financial services without the appropriate licensing. Unfortunately for the investigators (and even more so for the people who entrusted the company with their funds) the directors are a slippery bunch and are nowhere to be found. Two of them are said to be already in South Africa while the third, a certain Mpumelelo Dube, is said to be in the country but is proving to be quite as elusive as his foreign peers.

The outlandish return on investment

KWD is said to have been promising to double people’s (deposited) money over a period of only four weeks. They must have managed to keep that promise quite a few times since scores of people are said to have been thronging their offices every day with many being turned away after the company reached its self-imposed limit of 300 people per day. So confident were some people in the scheme that they “invested” as much as USD 10 000 of their hard-earned monies. The minimum investment amount was pegged at USD 100.

All signs point to the fact that KWD was a classic Ponzi scheme where new so-called investors’ money was used to “double” the money paid out to older investors. While all Ponzi schemes are doomed to eventually fail because their business model is at the very least unsustainable (they collapse when they run out of people to recruit), KWD’s demise may largely be attributed to the interest which the RBZ took in it—and the subsequent flight of its directors with all the money.

Some strange Middle Eastern references

Upon handing over their money to KWD, people would be required to fill in forms written in Arabic, which none of the participants could read or understand obviously. Since most of the participants appear to have been more concerned about their outsized returns over anything else, much less the dubious forms they had to fill, they could just as well have been signing their names underneath a nursery rhyme.

The full name of the company as told by some of the schemes’ participants is also telling—some called it “Kuwait Dinar” while some used the much longer “Kuwait Dinar Africa”. For those who don’t know, the Dinar is the official currency of Kuwait, a country in the Middle East. The Kuwait Dinar also happens to be the world’s highest-valued currency unit per face value.

It’s one of many

KWD is only one of several Ponzi and pyramid schemes which have been cropping up and gaining popularity ever since the COVID-19 pandemic started. The epidemic necessitated some movement restrictions which disrupted economic activity and caused people to start looking for alternative sources of incomes. Such schemes, which had mostly taken a hiatus after foreign currency became scarce in the country a few years ago are now back with a vengeance with each one’s participants vehemently defending it right up until the point where any sign that it ever existed disappears.

Why people will keep falling for such schemes

People’s main weakness when it comes to such schemes is that they don’t understand how financial institutions work or are supposed to work. Other similar schemes like the one called Bevern (which the RBZ is also keenly investigating) have given participants throwaway lines like “we own a gold mine” as an explanation for how they are able to multiply money and people have been more than satisfied.

There are some people who know exactly what Ponzi schemes are but prefer to point out how you can make money in such schemes as long as you are one of the first. So to such kinds of people, Ponzi schemes are just a form of gambling. Unfortunately for many who are unaware that they are being duped, the outlandish returns are too tempting for them to take their profits and quit while they are still ahead. Many of these people will instead keep on enthusiastically putting the same money back into the Ponzi scheme, watching in delight as it keeps on growing only to lose it all after the whole thing collapses. Another problem with this bravado approach to Ponzi schemes is that they do not always die a natural death as everyone involved in KWD has discovered; sometimes the authorities crack down on it while in other cases the owners of the scheme abscond with all the money (again, just like KWD).

While it would be easy to just call the people who fall into such schemes gullible, ignorant or worse, the truth is that few people actually know how the business models of financial services companies are supposed to work. Even worse, many people still don’t understand what the problem with Ponzi or Pyramid schemes is—all they need is reassurance that it’s not a scam by seeing someone else benefitting (or claiming to). Also, the people who design these schemes work very hard to prey on people’s emotions and needs.


Meanwhile, Mpumelelo lately of K.W.D lives up to the meaning of his name using his ill-gotten gains (his name means “success” in both Ndebele and Zulu). Unfortunately for us all, being a fugitive is not that hard nowadays; we are literally required by the law to wear masks which cover half our faces.