It’s a rude reality but let’s face it, the poor, yes the poor, cannot rely on the promise of better life with Kapa or other investments scams around town.
The enticing prospect of receiving 30 percent of one’s contribution, designated in Kapa’s case as donation, on a monthly basis for the rest of one’s life is indeed an offer that’s too hard to refuse. It’s too good one must be crazy not to put his money on it.
Only if it’s realistic.
However, not only is it unrealistic. It is mathematically impossible.
The “give P10,000 take P3,000 a month for the rest of your life” scheme given the statistics of Kapa would show that if it has 5 million members as claimed, it would have at least 50-billion pooled capital if each one of the members gave the minimum of P10,000. To sustain its promise, Kapa will need P15 billion a month to pay 5 million members, who have contributed at least P10,000 each. Given that it has P50 billion in pooled capital, this money, the money is enough to pay its members for only 3.3 months unless it will have new members coming in or existing members pooling more. Yes, it’s true, the early members of Kapa have earned cash. The problem, however, is that the money they earned came from other people.
What about the new ones?
Kapa claims that has been operating for 6 years and has amassed a diverse portfolio of businesses enough to sustain its promises to investors. The Securities and Exchange Commission (SEC) said that majority of the businesses are newly registered sole proprietorships while some of the corporations which are allegedly acquired by it do not have financial capabilities to generate the necessary funds to sustain the high returns. There is no way the new companies under its fold could have generated billions. Not even the country’s top corporations, according to SEC, could earn that big.
As of 2017, Kapa’s assets amounted to P465,000 with liabilities of P170,000 while on the revenue column, it has P425,000. No financial statement was filed by Kapa in 2018, according to the SEC. Meantime, companies claimed to be acquired by Kapa did not earn near the needed amount to pay out investors. Kapa-Community Ministry International earned P425,000 and spent P419,000 in 2017 or an income of P6,000 during that year. Aces Tagum College earned P24.3 million in 2018, while its expenses were at P23.3 million, which means it earned just P1 million that year. On the other hand, Tagum Doctors Hospital’s earnings in 2017 amounted to P171.7 million with expenses of P164 million for a net P5.3 million revenues that year.
Credit to Kapa’s savvy in mixing old scam techniques like Ponzi with prolific social media that it’s scheme enticed millions of Filipinos, mostly the poor, with high hopes of a comfortable life who found Kapa as the vehicle towards their life dreams of fast cash with less effort. The deception vehicle had all the perfect components — a recycled engine from a vintage time bomb, shiny exteriors, comfy interiors — except for one. And that is the fuel to sustain it on the road.
And as this vehicle continues to run, expectant passengers holding up their tickets will end up waiting at every stops. The farther it runs with its fuel supply running out, those waiting at the stops will be looking at that lonely road. Those tickets won’t take them to wonderland no more.
Say it isn’t so, but yes. It’s but a fairytale ride.
