Nigerians Still Invest in Ponzi Schemes

Nigerians Still Invest in Ponzi Schemes

MMM (Mavrodi Mundial Moneybox), a social financial networking scheme, came into Nigeria around November, 2015. The Ponzi scheme promised Nigerians 30% returns on the money they “invested”. However, they will not have access to their money and the “interest” until it matures 30 days later. This promise was so enticing because whereas banks will give you 0.3% interest on your money with them (that is if you didn’t withdraw from it within the month), MMM will give you 30%. This promise of financial independence attracted many Nigerians.

I was among the subscribers of MMM. I learnt about it through my neighbours, who came to sell the idea in the school I worked with then. Most of the teachers jumped in and we really enjoyed it while it lasted. When MMM crashed, we paid the price fully.

The news of the suicides that followed the crash of MMM still tastes bitter in my mouth. There were also cases of crashed marriages and businesses because of unwise investments made by people who believed MMM was their answered prayers. The country was indeed thrown into mourning that period.

But have Nigerians learnt from this bitter experience? No, not at all; they have actually learnt nothing. Most Nigerians refused to learn. MMM only opened the door for more fraudulent Ponzi schemes to enter Nigeria.

Sometime in April, or was it May, my friends contacted me and asked me to invest in another Ponzi scheme called Loom. This one pays eight times of a person’s investment after some days (I think after four days). I told all my inviters that I am yet to recover from MMM so I won’t go in for Loom, which I saw as a looming disaster that will only bring me gloom. I was called chicken livered and all, but I don’t regret my decision because Loom has joined the list of Ponzi schemes in the waste bin.

What prompted me to put up this article is that I went into my Telegram page this morning (after weeks of not visiting it) and noticed a lot of notifications from people and groups I knew nothing of. I only belonged to three groups in Telegram, which I joined because their activities and discussions help me a lot. But today, I found seven new groups that I didn’t add myself and people I don’t know by sending me private chats.

I ignored the chats because I’ve discovered how porous Telegram is but I decided to check out the groups. Out of these seven new groups one discusses matters relating to community development (they are adding people from Anambra State so I guess it has some political undertones) while the other six post matters that sounded like Greek to me.

In these other six groups I’m referring to, I saw comments like, “boss, confirm my payment”, “I want to send up 500k”, “manager reply my direct chat”, “new members have special offers”, “promo package for those that brought new members” and things like that. The first thing my mind told me was, “these are fraudsters”. But as I checked more of these groups, I noticed that they are different Ponzi schemes quietly making their transactions through the social media. People quietly add those they felt will be interested without first notifying them. Maybe, they hoped that by the time the person studies the movement of cash up and down, he will be enticed into the game.

So, here is the whole summary, MMM is still operating in Nigeria. But it is wearing different clothes and answering different names right now.

Of course, I heard that the original MMM is still operating in Nigeria even though its founder, Sergey Mavrodi, has died. But that is not the point I want to make here. The major issue is that Nigerians are still “investing” their hard earned money into wrong ventures.

If you truly sit down to analyse why people go into Ponzi schemes you will agree with me that poverty wasn’t the cause. During the MMM days, people accused poverty for influencing their decisions to take the risk. But today that NairaBet, NaijaBet and other betting houses have kept the low income earners busy, no one will accuse poverty again for pushing people into this high risk “investment” plan.

It is improper to refer to any of these Ponzi schemes as investment. Yes, it increases the money the person “invested” by collecting from other “investors” to settle him; but is that how investments work?

Nigerians need to understand that they can never increase their income through these shady ventures. They need to learn the “easy come easy go” idiom and put it to use. They should stop taking unnecessary and stupid risks. There are so many ways money can be invested and there are many ways income can be increased, choosing Ponzi scheme will only end in disaster.

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