By Kuranga Abdulazeez
According to Investopedia,a PONZI scheme is an investment fraud where clients are promised a large profit at little to no risk. Companies that engage in this scheme focus all their energy into attracting new clients to make investments. This new income is used to pay original investors their returns, marked as a profit from a legitimate transaction.
Ponzi schemes rely on a constant flow of new investments to continue to provide returns to older investors. When this flow runs out, the scheme falls apart.
The salient features of a Ponzi scheme are listed below:
1) Owners and creators of the scheme hardly advertise but rely on word of mouth to spread the "good news".
2) It relies on new members to sustain the scheme.
3) It is often impossible to determine the asset value.
4) They by nature, do not have any underlying asset that the money is invested in.
5) They are not recognised by regulators.
6) Returns are consistently high and steady( www.punchng.com/29/09/2016).
MMM was established in 1989 by Sergei Mavrodi, his brother Vyacheslav Mavrodi and Olga Melnikova. The name of the company was taken from the first letters of the three founders surname( Wikipedia).
MMM was a Russian company that perpetrated one of the world's largest Ponzi schemes of all time. MMM is not a bank, MMM does not collect your money, MMM is not an online business, HYIP, investment or MLM program. MMM is a community where people help each other. MMM gives you a technical platform which helps millions of participants worldwide to connect those who NEED help to those who are ready to PROVIDE help, for FREE. All transferred funds to another participant are your help given by your own good will to another one, absolutely gratis (http://m.mmmglobal.org/what_is_mmm/)
In 2015, MMM began operation in south Africa claiming a "30% per month" return through a "social financial network" and in 2016, it launched a website targeting the Nigerian audience and has attracted over 400,000 people to it since it came into the country.
Tolu Alegbe had this to say...
On MMM issue, I have refrained from directly commenting on threads advertising the scheme to avoid being misunderstood. But it's really sad that I am surrounded by people (albeit on social media) whom I expect to really know better. You may need to bookmark this post for reference purposes because surely, someday... "this beans wey una dey cook go done"
Make no mistakes about this, at the moment, MMM pays! But have you ever stopped to wonder how this thing really works? What sustainable business guarantees such mind blowing returns on a weekly and monthly basis? I hear you can make as high as 30% monthly.
Testimonies flying around, MMM is legit, it's real, "bla bla". Here is what is happening: Mr A (Generation 1) invests his N10. Mr B, Mr C and Mr D (Generation 2) then register after him and are told to pay into Mr A's account. Mr A cashes out, is happy and spreads the word. Messrs E, F, G, H, I, J, K etc (Generation 3) then register and are told to pay into Messrs C, D and E's accounts. Generation 2 also cashes out and further spread the news... And so the cycle continues.
Someday, the alphabet will get to Z and the scheme will run out of new entrants. When this happens, what becomes of the investors still in the business? They preach emancipation and freedom but in reality, they are taking advantage of man's natural inclination to be greedy and want more to further enslave and cheat him of his hard earned money especially the exuberant youth with a high appetite for risk. Because once you try it with a small amount and find out it works, you will want to perhaps invest some more and even some more till... Never mind.
So here is my advice to those who care to listen: since it's your money, and you alone know what you went through to get it, only you would know how painful it would be to lose it. As for me, since I have a tree in my backyard where I pluck N1000 notes from, why not?
And in defence of MMM, this was a reasonable reply Tolu Alegbe got:
Good one Tolu. There's more to MMM than what you put up in this piece. As a banker, it might not occur to you that if all GTB customers heard a panic-news from CBN today. Do you think the people won't rush to the bank to get their money? If everyone does, what is the assurance that GTB can pay 75% of their customers at the same time? It's impossible, WHY? Staffs are being paid by these customers, different branches are erected by their money etc. So if the bank truly has products they are offering, why do they seek more customers on daily basis? And where do they get money to pay staffs salary, car loan, house loan etc if 100% of customers come for their money at the same time? All financial institutions uses CROWD-FUNDING to ease payments. If not why would insurance promise you 5 million naira on 5000 premium per month for less than 5years at times?
My take on this is that as long as the banks and other financial institutions that creates over 90% debt just to use the money to pay their staffs, erect structures in different branches, and returning less than 5% to the real owners of the money can last for 20 to 25 years. Then I think MMM, will last more. MMM is just creating 30% deficit in the community and this 30% is not for expenses but for the participants to be happy and stay independent of the bank tricks on loans. MMM Nigeria already understands that the SEC and CBN can never be happy with this development and we are aware of the risk involve and we know how to avoid such risk. This system is in 118 countries and has over 200 million participants. In less than a year, there are over 700,000 participants in Nigeria already. MMM pays and its truly a weapon for the masses. Financial apocalypse is inevitable. MMM! Together we are changing the world.
In conclusion, this write-up is not to promote or rebuke MMM but to give an insight into the scheme as well as educate the readers. However, when thinking on embarking on schemes like this, one should not forget to take into consideration certain factors such as if it is actually registered in the country or recognised by the regulators or listed in the stock exchange.
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