With the recession in full swing in Nigeria more Nigerians seem desperate to find solutions to the pinch in their pockets. So much so that the voice of reason has been drowned by the din created by the latest rave to hit the Nigerian scene – MMM Nigeria. MMM is a ‘social financial network’ founded in 1989 by three Russians, with Sergei Mavrodi at the forefront. The network promises returns of 30 per cent to investors who ‘help’ members of the network by parting with some level of funds. While this sounds very attractive (I mean, no bank is paying up to 30 per cent interest, is there?) I have an arsenal of reasons why you should avoid MMM like the Black Plague. So allow me load my metaphorical revolver:
Bullet 1: Fraudulent founder
The founder of MMM, Sergei Mavrodi is also a Russian criminal. After declaring MMM bankrupt in 1997 he went into hiding. His arrest came in 2003 (Source: Wikipedia).
Bullet 2: Illogical source of returns
The source of the 30 per cent return promised to investors is entirely dependent on new or existing members contributing to the pyramid. In contrast, banks receive customers’ deposits and lend to screened borrowers who pay back usually in instalments with interest. In MMM, you do not get the promised return once funds coming into the scheme is less than investors’ funds.
Bullet 3: Legality of business
MMM is not a legally registered business. MMM Nigeria is not licensed by any Nigerian authorities. The Securities and Exchange Commission, Nigeria (SEC) has not registered MMM’s operations (Source: SEC Nigeria).
Bullet 4: Warnings on website
On the official MMM Nigeria website in the ‘About us’ page, you will have to study the instructions carefully before joining. In other words, are you prepared to part with say $100 and send same to a complete stranger without any written agreement?
Bullet 5: Trend of collapse in other countries
This perhaps is the most important bullet (point). ‘MMM-2011’, one of the series of MMM schemes, launched in January 2011 and later ceased operation in May 2012. Below is the trend in the last 19 years:
- MMM launched in Russia Feb 1994 and crashed in Jul 1994
- It started operations in South Africa in 2015 and had accounts frozen in 2016
- The Chinese government banned the scheme in 2016
- MMM launched in Zimbabwe early 2016 and froze in Sep 2016
- The MMM train arrived in Nigeria in 2016 and already rumoured to activate a ‘pause mode’ in December
Bullet 6: After MMM Nigeria crashes
For the observant readers you may have noticed that I began the title of this article with ‘5 reasons…’. This was not a typo as you may be wondering the purpose of the sixth bullet (point). Well, if you decide to invest your millions into this Ponzi scheme and it eventually crashes I think the purpose of the bullet will become a whole lot clearer.
In conclusion, many Nigerians have ignored the warnings altogether and are currently enjoying returns even they themselves cannot explain. MMM Nigeria is a ticking time bomb. When it explodes it’ll affect mostly everyone at the bottom of the pyramid.This Ponzi scheme in my opinion is fraud in the guise of helping others. For argument sake, let’s say there are only 31 people in Nigeria. 1 MMM member lends to 5 other members. Those 5 members lend to their respective 5 members (i.e. 25 members). The first 5 MMM members pay interest to the topmost member. The 25 MMM members pay interest to the first 5 MMM members. Who pays interest or even the principal of the 25 members? What if the topmost member and the first 5 members decide to leave the MMM network?
I wish you had something better to say.
And I wish you didn’t bother commenting.
Hoooo…That was one classic and classy reply!
hmmm interesting facts. truth is, I was never interested in dis scheme.its just too good to be true.these facts have only helped to strengthen my decision.I like to knw where my hard earned money goes to.so until den, its safest in my account.
I’m glad you made the right decision. Stay tuned for the crash.
All the WARNINGs are there on the Official site for everyone to see. It is not compulsory to join the scheme, but if you do, “participate with your spare money” don’t contribute all the money that you have. This platform is a charity platform that operates basically on the principle of ‘Power of Giving’.
Anyways, good or bad, people are getting paid. Leave them alone for their FATE. They chose to participate, they know what they want.
I’m just being neutral here.
If you want to join, join
If not, don’t.
Thanks for your comment. In addition, people should ask questions and do their own research. Not everyone that was referred by a promoter understands the risks involved. They are simply just giving money and expecting a return. So far as they know what they’re getting into from the start then to each his own.
Jollof, even with the caveat, people are going to do what they want to do. There will be winners and there will be many losers who will learn the hard way, just like gambling, especially for those who invest more than their spare cash.
Scheme providers like this will always capitalize on the greed & desperation of the less financially sophisticated folks every 5 to 10 years in societies. Remember Sefteg, Umana Umana & the likes?
Anyway, thanks Jollof for the warnings. You have done your part.
“Remember Sefteg, Umana Umana” Mehn, how can I forget those wonder banks. I guess I have indeed done my part to warn everyone. A word is enough for the wise – I just published a whole article for the f…not-so-wise folk, lol. Thanks Mr. Sene 😉
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