• Tuesday, 21 May 2024
The IMF wants Kenyan banks to have more anti-corruption controls.

The IMF wants Kenyan banks to have more anti-corruption controls.

The International Monetary Fund (IMF) is calling for stronger controls on bank transactions in Kenya, citing increased worries about money laundering by corrupt networks.

According to an IMF team's assessment report, Kenya should use financial intelligence tools to increase checks on corruption-related money laundering risks in banks and other high-risk industries.

"Anti-money laundering and counter-terrorism financing oversight should be strengthened to limit corruption-related money laundering risk in banks and other high-risk sectors, and better use of financial intelligence should be made," the IMF team said.

Kenya has recently seen an increase in alleged money-laundering operations, with billions of shillings taken from firms and individuals who could not explain where their riches came from.

For example, the government of Nigeria has seized over Sh15 billion from individuals and businesses this year, with the majority of the funds alleged to be the result of card fraud or remittances made by payment service providers.

The largest cash seizure from the West African country belonged to the start-up firm Flutterwave, with Kenyan officials suspecting that the Sh6.2 billion in 62 bank accounts as part of card fraud and money laundering activities.

Last December, the Asset Recovery Agency seized Sh108 million from a lady in Kiambu County on suspicion of participating in a money laundering conspiracy.

According to court documents, Tebby Wambuku Kago, together with an associate Felesta Nyamathia Njoroge and a sister Jane Wangui Kago, got a total of Sh260 million from Belgian Marc De Messel between August and November last year through two Equity Bank accounts. The Belgian, a cryptocurrency dealer, stated in the statement paperwork that the money was given to him as a present.

A recent US State Department study warned of laxity among Kenyan officials in the global fight against money laundering, with officials alerting suspects to relocate assets before confiscation.

According to the annual International Narcotics Control Strategy Report (INCSR), mobile lending platforms on Safaricom's M-Pesa system, such as Mshwari and KCB-M-Pesa, are not tightly regulated, and Kenya's proximity to Somalia has made it an "attractive destination for funds from unregulated Somali sectors."

In September, a team from the 19-country Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) — the regional watchdog — is set to provide an evaluation report on the efficiency of Kenya's financial institutions and regulations in combating money laundering and terrorism financing.

Share on


// //