December 2016 still leaves a wound in the hearts of many Nigerians. The popular Ponzi scheme, Mavrodi Mundial Moneybox(MMM) crashed leaving many broke, in debt and stranded for that Christmas. MMM is a global Ponzi scheme that was launched in the year 2016 in Nigeria and embraced as a good investment venture by many Nigerians, despite the warnings of the Central Bank of Nigeria(CBN) and government authorities. The Nigerian Deposit Insurance Corporation(NDIC) later announced that an estimated three million Nigerians lost 18 billion naira to MMM. In April 2018, the management of the Ponzi scheme announced a final shut down of operations due to the death of the founder, Sergey Mavrodi. Different reactions followed the news but one thing was sure, MMM in Nigeria had come to an end.
MMM is non-existent now, but that does not mean Ponzi schemes have ceased to exist in Nigeria. There are numerous platforms that promise a get rich quick investment, goodies and abnormally high returns. One of them is Loom Money Nigeria which is popularly known as Loom. The pyramid scheme took over social media in 2019 and promised 800 percent returns on investments after 48 hours. Individuals could invest between 1000 naira to 13000 naira and make between 8000 naira to 104,000 naira. Unlike MMM, Loom has no major promoter or website, the system operates on social media through closed Facebook and WhatsApp groups. The groups are usually made up of eight people who contribute the total amount to be received by one person who then leaves the group. Members of the group have to convince friends or family to join the group so they can get their money. The Loom pyramid scheme is a very dangerous one because anyone can create a group, collect money from other people and shut the group down. In June 2019, angry customers of Loom Money Nigeria stormed the company’s headquarters in Lagos after the scheme crashed. The office was said to be deserted and history repeated itself once more: Nigerians lost their money.
Despite the warnings of the Security and Exchange Commission(SEC) concerning investing in Ponzi schemes, Nigerians continue to fall victim to these scams. There are numerous Ponzi schemes in Nigeria and they range from Citifund, Loopers, Twinkas, Ultimate Cycler to Givers Alliance, Binomo investment among many others. The main reasons people fall for these scams is greed. Most safe investments do not give more than a 15 percent profit, but Ponzi schemes promise whooping profits of between 30 to 800 percent. Identifying a Ponzi scheme in this times is not difficult: Any investment platform that promises abnormally high returns consistently is a Ponzi scheme. Ponzi schemes usually do not have assets or businesses where the money goes, so they are not recognised by regulatory bodies such as the Security and Exchange Comission(SEC). Another way to spot Ponzi schemes is that everyone invests in their companies and they require you to bring someone else to invest.
MMM has made a comeback in Nigeria since mid 2019. The platform rebranded as MMM Cooperation promises a 50 percent profit on investments, 20 percent higher than as before. This shows that people will still continue to invest in Ponzi schemes for years to come. The truth about such investments is that they always crash after some time because there is no supporting business to provide funding for such high returns. MMM has been used in the media as an abbreviation for the Yoruba sentence, “Mo ku, mo gbe, Modaran,” which means “ I am dead, I am finished, I am in trouble.” That sentence gives a vivid description of the emotional state of people who have fallen victim to Ponzi schemes. Try not to be in that state: avoid Ponzi schemes.
P.S: If you have spare money, it is better to know that you wasted it on enjoyment, than to lose it to a scammer. Do not borrow to invest and do not invest in anything you do not understand. If you hear of any Ponzi scheme, take to your heels and run.