See How Jumia Kenya’s Employee Stole $150,000 by Manipulating Vendor Payment Records

Jumia Kenya has recently issued a report which revealed that one of its employees stole over $150,000 (Sh21.2 million) through the manipulation of vendor payment records, which further exposed the platform's vulnerability to fraud.

The firm, which has been experiencing losses in the Kenyan market, says it detected the scam in September last year, in its recent reports issued to US regulators.

“In September 2022, we discovered that an employee in Kenya manipulated certain vendor payment entries and misappropriated payments in 2021 and 2022,” Berlin-based Jumia Technologies AG said in the filing.

The e-commerce platform gives vendors the ability to feature goods online on the site while sellers are given the privilege to order and pay before or on delivery. 

However, the firm is making moves to frustrate the activities on the platform given that the e-commerce platform has many populations thereby giving room for those with bad intentions. 

The Filing Reads in Part,

“While the financial impact, in this case, was not material (below $150,000), any such illegal, fraudulent, or collusive activities by our employees could have a material adverse effect on our business, financial condition, results of operations, and prospects and could subject us to liability or negative publicity.”

The failure to handle efficiently any fraud perpetrated and false transactions done on its platform are among the biggest risks that might hurt Jumia Kenya's company, according to Jumia Technologies AG, the trading organization under which Jumia Kenya falls.

Also, it has been reported that fraud is a rising problem for many Kenyan businesses, with technology bringing its own set of challenges as well as benefits such as cost management and speedier service delivery.

Read more: How to get jobs in Jumia Nigeria

Firms That Had a Decrease in Their Revenue Due to Illegal Practices in Kenya

- Due to the rise of fraud in Kenya, Safaricom had to sack 33 workers for fraud-related crimes in the fiscal year ending March 2023, up from 24 the previous year.

- According to its annual report, I&M Group's lost $10.3 million (Sh1.46 billion) in illegal client withdrawals in less than three months, prompting investigations to try to recover the funds.

- Absa Bank Kenya claims it lost Sh107.7 million to fraud last year but recovered Sh59.1 million. During the same period, it also prevented fraud of Sh428.5 million.

• “Fraud remains a major challenge for the financial sector in Kenya. In line with the trends observed in 2021, fraud continues to evolve rapidly and match the increased preference by customers for digital propositions,” said Absa Bank Kenya.

Losses experienced from fraud are a big disadvantage for Jumia— The e-commerce giant operates in 23 African countries and recorded a loss of $238.3 million (Sh33.8 billion) last year, with Kenya accounting for Sh12.3 billion of that.