Government acts on crowdfunding platform
The Vanuatu Financial Intelligence Unit has directed the Vanuatu-based Bless to be Blessed Business to operate by proper guidelines before the end of the week.
The company which encourages public ‘crowdfunding’ of its activities is headed by Jenny David who has not commented on the Financial Intelligence Unit directive.
Ms David told VBTC the company had just started up so could not make comment.
Following public concerns being raised about the company’s operation, representatives of the business met with the Financial Intelligence Unit on Monday.
Floyd Mera, the Director for the Financial Intelligence Unit, said the unit found the business needed to have better guidelines in place to avoid risking investors’ money.
He said the business promised a huge return to investors but seemed to provide no protection to investors in its guidelines.
He says his unit is working with the Bless to be Blessed Business to put adequate measures in place for it to follow before the end of the week.
The Financial Intelligence Unit says it is surprised that the investment in the business is open to the public.
“From what we understand, the business only deals with a close groups of friends and associates who want to raise funds,” Mr Mera said.
“But the business is open to the public and we have identified that this creates a risk to investors.
“We want to talk to the business owner, assess the risk and help the business to put in place measures to reduce the risk.”
Crowdfunding platforms are online schemes that encourage members of the public to contribute money to support often socially-worthy projects.
Many crowdfunding platforms offer no financial returns to investors and are simply a way for people, business and charities to raise money for good causes.
But the Bless to be Blessed Business appears to offer those who invest 21 days to get a five-time return on their investment.
For example, it offers member a return of VT38,000 on a VT5000 deposit.
VBTC understands the Bless to be Blessed Business scheme started as a community project with a group of women sewing clothes at Center Point in Port Vila.
It appears Ms David later opened up investment in the business to the public, prompting concerns about how the business could provide returns to all of its members.
The business has now moved its office to a location opposite the Emalus Campus.
The Vanuatu Chamber of Commerce has already warned the public against investing in crowdfunding schemes.
The Reserve Bank of Vanuatu delayed the launch of a crowdfunding platform last year because Vanuatu currently has no law in place to regulate the operation of such schemes.
The Reserve Bank has warned that crowdfunding takes money through public deposits but there is no protection to the money deposited.
The Reserve Bank of Vanuatu says it is important to have legal frameworks in place before such schemes start to operate.
The Governor of the Reserve Bank of Vanuatu, Simeon Athy, says crowdfunding platform should be encouraged because they can raise much-needed funds for businesses and non-profit organisations in Vanuatu.
But, he says the platforms need to operate under the right legal and regulatory framework.
Mr Athy says there is currently no legal authority in Vanuatu for private companies to raise money from the public through such platforms.