MMM is Ponzi scheme, Nigeria confirms as it hunts to arrest promoters
Nigeria is taking pro-active steps to stop Ponzi scheme MMM from operating in its country – hoping to track down and arrest its promoters before too many of its citizens are caught up in it and lose everything.
This is according to reports from Nigerian media, covering messages from the Nigerian government’s House of Representatives.
The chairman for the Nigerian House Committee on Telecommunications, Saheed Fijabi, had in a motion, drawn the attention of lawmakers to the scheme, which entered the Nigerian online space in 2016.
Fijabi said that the scheme was “capitalising on the high level of unemployment and poverty to deceive unwary Nigerians into falling prey to the antics of the promoters”.
The fact that the MMM was not regulated by law or approved by the CBN as a secured business venture made Nigerians more vulnerable, he said.
In September, the Nigerian Securities and Exchange Commission said in no uncertain terms that MMM had no viable business model and said it was an obvious Ponzi scheme.
The Central Bank of Nigeria (CBN) called it a fraudulent system, and warned Nigerian citizens to steer clear of it.
Now, the Nigerian House of Representatives has approved a probe into MMM’s activities in the country, and has ordered authorities to track down the scheme’s promoters in the country.
According to reports, the key concern is that those behind the MMM are not known to any of the Nigerian regulatory agencies, including the Central Bank and the Nigerian Deposit Insurance Corporation, making it difficult to identify its promoters.
This carries deep implications for the government, as when the system inevitably collapses – as it did in Zimbabwe, South Africa and wherever else it operated in the world – citizens will have no where to turn for recourse.
MMM South Africa
MMM South Africa collapsed and restarted around mid-2016, after the user base for the scheme dried up. The scheme-runners in the country blamed ‘the media’ for scaring users away, causing funding to cease.
In the rebooted version, MMM South Africa pushed the debt (the money which could not be paid to old users) onto all the new users, effectively starting all new adopters off at a loss.
South African authorities have danced around officially labelling MMM a Ponzi scheme in South Africa, however the banks have been more proactive in preventing customer accounts from transacting with the scheme.
Capitec led the charge earlier in 2016 by freezing accounts associated with the scheme – while the other banks have identified and monitored transactions used in association with it.
MMM South Africa is still in operation, though its user base is unknown. The scheme is still under investigation by the Hawks.
The scheme operates as a “peer to peer donation platfrom”, requiring users to “donate” money to each other, with the trust that they will have their “donation needs” met in return.
It offers returns of over 30%, which fits the South African Reserve Bank’s definition of a Ponzi scheme.
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