Many people that have attempted to do law observing business in Uganda, will attest to the fact that it is not an easy thing to run a business in Uganda. From the ever-changing market prices to poor law enforcement in case things go wrong; the list is simply endless when it comes to fraud and unprofessionalism in Uganda’s business world.
It is therefore very important to take caution when considering any investment plan in Uganda. Though everyone would wish to put their money in something that has high returns, asking the right questions will save you from many scams that present themselves as opportunities.
Today we attempt to ask those important questions peradventure we shall arrive at a conclusion we can all agree about. In case we disagree, time will prove who was right. We have reviewed scams such as BLQ, Century Ranch among several others. And this time, we put Capital Chicken to the litmus test.
What is Capital Chicken?
Capital Chicken is a poultry investment company that promises to pay an interest of 10% every single month you invest your money with them. They promise to use your money to grow broilers and give you a profit return of 10% per month or 12% per month if your investment is above 3 million Uganda shillings.
Is Capital Chicken Legit?
There are basically five selling points that capital chicken is likely using to blind many people into investing with them.
- The huge return on investment (10% to 12% per month)
- Having a physical farm in Mukono-Nyenje that can be visited by anyone who wishes (7-acre farm)
- Claiming to have your money insured against loss of birds
- Having a physical office that you can visit at anytime
- Associating with reputable people to buy public trust
If capital chicken is a legit investment, then it is the best investment plan you can ever have in Uganda. But if it is a scam, then it is going to be among the biggest scams in Uganda’s history.
Terms of Investing Money with Capital Chicken
With the above selling points at the back of your mind, you will be presented with a contract that promises 48% interest in five months or 60% interest depending on your investment plan.
Since they have a physical address, they also have bank accounts in the name of Capital Chicken SMC Ltd. This is in Stanbic Bank Uganda and Housing Finance Bank Uganda. It is on these accounts that you ought to make your deposit based on the investment plan.
There are other means of depositing money such as mobile money but the bank makes them seem legit at face value
Among the terms, Capital Chicken simply promises to pay you your money with interest after five months. There is nothing expected from you once you invest with them apart from the termination terms which are not well stipulated. They can only be agreed upon at the point of termination.
Is Capital Chicken A Scam?
In simple terms, Capital chicken is a scam that will close anytime in the near future. Here are the facts to look into so that you may arrive at the same conclusion.
Time Taken To Pay Your Profit
Capital Chicken claims to get profits through growing broilers. These kinds of chickens grow in just one month. Any open-minded person would expect to earn their profit for the first month latest a month after their sale. But you have to wait for 5 months for you to be paid your profit.
If your money is increasing at the end of every month, how is it that interest is calculated based on the initial deposit, not the accrued income?
Why is there no option to negotiate for 3 months, 4 months, 6 months, 7 months, or any payment plan you wish to opt for after all you are to sign a contract, and the profits are always guaranteed
Why 5 Months payment plan?
When I asked Capital Chicken why there was no option for a one-month payment plan, they said they have to make money first by selling and buying birds at least 4 times! But if you are already making money every time you sell, why don’t we plan an investment based on paying me every time you sell?
There is no logical explanation as to why someone who makes profits using your money in one month but still refuses to give you your cut until 5 months elapse!
Capital Chicken Is A Ponzi Scheme
Capital Chicken is a scam and a Ponzi scheme. Every time someone deposits money which they have to wait for 5 months to get back, the same money is used to pay people whose investment time of 5 months has elapsed. The more people they have joining, the more money they have available to pay their first investors.
When the time comes when there are more people who are supposed to be paid than there are people joining, the businesses automatically collapse. It starts with delayed payments followed by a number of excuses on how the system is down but they are working on it! And lastly an exit.
Simple Capital Chicken Math Exposes the scam
First of all, it might be possible to earn a 10% profit from growing broilers in Uganda. That is the good news. But if the profit earned is 10%, and this 10% is given back to you, what does Capital Chicken remain with?
If all the profit is given back to you, then that makes capital chicken a charity organization which obviously is not the case.
What about in instances where they are paying 12% profit? If the profit earned from selling broilers is 10%; where do they get the 2% that they always top up to pay you a 12% profit?
If Capital Chicken can pay 120% interest per annum, their leading clients would have been banks. Think about it, a fixed deposit account earns you less than 10% per annum (less than 1% per month). If Capital Chicken can pay 12% per month, then banks would be earning a 110% profit if they invested with capital chicken.
If Capital Chicken is indeed a legit investment plan, why aren’t banks and retirement schemes their leading clients?
There is no clear authorizing body for Capital Chicken in Uganda. In other words, there is no clear government authority you can associate them with in case things go bad.
Capital Chicken is a Scam
The basis upon which capital chicken will claim its legitimacy will be testimonials. But like any other Ponzi scheme, it will always pay its first investors until the business reaches a point where they have more people cashing out than they have new investors.
Remember this business is not sustained by growing broilers. It is sustained by getting new investors.
What to do if you have already invested
Negotiate for termination of the contract. Or take your chances and wait for the cash-out time. If the cash-out time comes and you luckily withdraw money, only invest with the profits earned from the Ponzi scheme. Do not put your money back.
If you have not invested, do not get tempted into investing with them because their business model is not sustainable. Many people can always come out to testify how they are earning huge profits but always remember, you can easily be among the people who fail to cash out on the eve of the scam.