Deputy Prime Minister (DPM) Jotham Napat has described the Apma Financial Investment Center (AFIC) Cooperative Savings and Loans Society as a “very sad story” and its operations a “scam”.
“There will be a report by the Ministry of Trade and Commerce, produced by the Department of Co-operatives on the findings of (the investigation into) AFIC,” he said.
“Currently there is no track record of members who have registered under AFIC. It is an operation which has many loopholes. And it is very sad that I can confirm to this House that the administration, structure and composition of members of the AFIC Board operate in a manner that is really a scam.
“The way that AFIC gets money from our people and the way the fees are managed is different from a banking system.”
DPM Napat noted it has taken the Department of Co-operative some time to conduct its assessments and finally they have produced a report.
“There are over 100 or 200 branches around Vanuatu that have registered under AFIC but we don’t have a track record of these branches, which makes things very difficult,” he said.
Equipped with the findings, the Department of Co-operatives has raised some complaints to the police on the usage of funds and other areas where there is no transparency.
“Some of the claims are being pursued in court.”
DPM Napat also described the report’s findings as “alarming”.
“It is about time we amend the principal Act in order to address the loopholes to ensure there is no repeat of the same thing as it currently stands,” he said.
“Now surprisingly the way that AFIC administered its operations is such that many ni-Vanuatu today still believe AFIC is alright but they don’t know the reality. It is very sad.”
Many people who saved a lot of money with AFIC, such as retirees have lost their hard-earned money.
The DPM added the Ministry of Trade through the Department of Co-operatives will conduct an awareness throughout Vanuatu’s six provinces to inform the members on the operations of AFIC and its current status “but it sounds really bad”.
DPM Napat was responding to questions raised when Parliament was debating the Bill for the Co-operative Societies (Amendment) yesterday evening.
The DPM’s statement is clear and should be a wakeup call to members of the public who may still have lingering doubts about the operations of AFIC as AFIC founder, Barnabas Tabirupmel (Tabi) starts rallying for support on his home island of Pentecost to contest in the 2020 General Elections.
The amendments to the Co-operative Societies Act [CAP 152] aim to align the Act with the Government’s new co-operative vision in the National Co-operative Policy 2017-2022 (National Co-operative Policy).
One of these is the transformation of the registrar of co-operative services into a prudential registrar; another the reorganisation of co-operative societies and turning co-operatives towards enterprise.
The current provisions in the Act are described as inadequate for the regulation of savings and credit co-operative societies, and consumer and marketing co-operative societies.
It is anticipated the effective regulation of savings and credit co-operatives will reduce contagion risk; facilitate financial inclusion; build confidence in the financial system and will enhance cooperation between the registrar of co-operative societies and relevant agencies such as the Reserve Bank of Vanuatu; the Vanuatu Financial Service Unit, and the Vanuatu Financial Services Commission.
The Bill for the Co-operative Societies (Amendment) Act No. of 2019 was unanimously passed by Parliament last night.