Kenya has the second highest rate of economic crime in the world with 75 percent. The report disclosed that customers are the biggest economic threat to businesses, with 37 percent of Kenyan firms having been hit by client-led fraud in the past two years.
Financial services and insurance services are the worst affected, having an incidence rate of 65 percent and 71 percent respectively. Other fraudulent practices include cybercrime, human resource fraud, money laundering and tax fraud. There is also bribery and corruption, procurement fraud and accounting fraud.
These incidents had a toll on businesses in Kenya, with a majority of respondents indicating that they suffered a direct loss of about $25,000 in the past two years of operations. “Other costs cited as having resulted from the occurrence of the economic crimes include the severing of business relations, brand and reputational damage, the plummeting of employee morale, and strained relations with the regulators,” the report stated.