Several days ago the Bank of Russia excluded Kreditor from the register of Russia’s microfinance institutions. In its commercials, Kreditor offered up to 120% return on deposits.
However, the commitment of the owners of the company to make people richer and happier was so strong that it seemed to overcome all bureaucratic obstacles. The organization returned on the market renamed RussInvest and a new unprecedented offer – 180% return on deposits! It changed a signboard and printed new business cards with more than 20 offices opened their doors to those wishing to become rich overnight. Judging by a steady stream of customers, it succeeds in doing that.
Customers line up near a Moscow-based office of RussInvest. Being questioned is it legitimate to take minimum deposits worth 30,000 rubles ($850), a company’s employee said he was not aware of the legislative restrictions and did not have time for that as he had to serve masses of people willing to give their money. Thus, RussInvest defies the law as under the Russian legislation, microfinance institutions are not allowed to take deposits below 1.5 million rubles ($42,300) from individuals.
RussInvest sticks to the same scheme Kreditor used: one company gives loans; the other one accepts deposits under loan agreements. However, the law is not violated formally as it is not a microfinance organization that takes deposits from people. RussInvest launched a summer campaign offering a 15% monthly return on deposits. Experts trace signs of a pyramid scheme in the company’s actions.
“It is completely absurd as no economy can withstand such an interest rate. An average return on deposits offered by microfinance businesses is greater than that of banks and is about 18-19% per annum. But there’s none that can provide the same figure on a monthly basis. It is as clear as day that it is a financial pyramid scheme”, Andrei Bakhvalov said, CEO of Russian company ‘Domashnie dengi’.
