I
have read with deep concern, the various accounts shared by many
Nigerians on their sad experiences on the Mavrodi Mundial Moneybox (MMM)
Ponzi scheme that has created a lot of apprehension, tension, anxiety
and uncertainty in the country.
Because of this unfortunate
development, millions of patrons of MMM have been thrown into confusion
having placed a one-month ban on all withdrawals starting from December
13.
MMM has claimed that it had frozen the accounts to avoid
preventable challenges during the Yuletide in the purported negative
media reports given to the scheme. MMM is not new in the business world.
It
is on record that the organisation began as an office equipment company
in Moscow, Union of Soviet Socialist Republic (USSR) in the 1980s,
before moving into the financial sector when the scheme collapsed and
many investors lost their money.
The MMM was able to win the
hearts of many Nigerians with its ‘30 per cent per month’
return-on-investment in addition to other acquirable bonuses.
But the hard truth is that despite the mouth-watering offer, the risks associated with the scheme seem to be more.
No
wonder, the company was ‘wise’ enough to have advised customers to:
“use your #SpareMoney only (and) don’t be unnecessarily greedy.”
What
this expression tells me is that the operators of schemes have cleverly
and tactically insulated themselves from any undue liability and legal
encumbrances.
The scheme has since been declared illegal by the
Federal Government. Before coming to Nigeria, MMM has similarly operated
in South Africa and Zimbabwe with the same business model, which
claimed a 30 per cent per monthly return-on-investment through a ‘social
financial network’ that until the accounts of its clients were frozen.
Similarly,
in 2016, the Chinese government banned the scheme on the grounds that
it was a Ponzi scheme, unregistered and hence, was tagged as a
fraudulent scheme.
What the organisation does is to manage
payments in such a way that quick returns to the first investors from
money invested are given to later investors in a manner described as
robbing Peter to pay Paul.
Despite the controversies surrounding
the modus operandi of MMM, Nigerians seem to have forgotten so fast the
lessons learnt from the failed operations of wonder banks in which
billions of naira went down the drain under similar circumstances,
despite warnings by the National Assembly, Central Bank of Nigeria
(CBN), Economic and Financial Crimes Commission (EFCC) as well as the
Securities and Exchange Commission (SEC), suggesting that the scheme is
fraudulent, but then, many Nigerians still patronized it. Three major
reasons could be attributed to this doggedness.
Firstly, is the
current economic situation in the country that has brought about untold
and high incidences of unemployment, inflation and poverty.
Hence,
people would want to do anything humanly possible to survive at a great
risk. Secondly, is the secretive and greedy nature of many of the
participants, who kept the offer to themselves, perhaps, to prevent
others from benefitting, thus making them highly vulnerable in the
process of secretly dealing with MMM.
Thirdly, is the weak
regulatory framework that allows such a system to exist without having
to pass through the necessary due diligence, checks and screening. No
wonder, MMM had the audacity to tell the Nigerian government to look at
the benefits of the scheme to the over three million Nigerians within
its one year of operation in the country, claiming that the scheme was
the ‘only source of livelihood for many people’.
The ripple effects of the MMM invasion have begun telling on the
people. Not a few investors were reported to have either committed
suicide or attempted such.
For instance is the story of a man from
Benue State, who was found to have ingested insecticide, having
invested N300,000 meant for his wedding in the dicey scheme!
From
the survey that I recently conducted, many people seem to be affected by
the loss but would rather prefer to remain silent rather than lamenting
their ordeals while many would rather prefer to keep mute for the fear
of being stigmatised.
Afterall, they never told anyone before
going into the scheme! That is usually the problem with those who fall
victims to fraudsters.
They hardly inform others they are deeply
engrossed in such a deal until everything crumbles and danger becomes
the inevitable. Despite the ordeal happening now, it must be appreciated
that people should be free to invest in whatever business interest they
so desire.
That is why I won’t be surprised that MMM may not be
the only active Ponzi scheme around. There is the likelihood that many
of such programmes exist under various names and brands.
Whenever
people are committing their resources into such deals, others hardly
know of it until things begin to unfold and they cry out of the untold
hardship and negative consequences that may arise.
It is the
secret nature of the patronage of the Ponzi schemes that makes many
innocent people to lose their head earned resources and savings, thereby
increasing the level of poverty in the land.
As a way forward,
regulatory agencies should do more by helping the citizens in beaming
their searchlights on other schemes to verify what is happening to them
before they become another source of national problem, source of worry
and tragedy.
The whole scenario bordering on how MMM has been
managed has shown that the economic problems that encourage people to
look for money at all cost, is not peculiar to Nigeria alone.
Governments
should come together to see how common problems could be discussed with
a view to finding sustainable alternative to Ponzi schemes that would
add value to the real sectors of the economy through spending.
It
is only hopes that by January, the scheme would come alive again as it
has planned to do by offering another opportunity for investors to
access their funds.
If this becomes a reality, they should pull
out. I won’t be surprised that in order to sustain their interest in the
scheme, an additional accrual of over 30 per cent could be dangled to
lure participants into keeping their keeping funds in the scheme and
even put in more resources after January.
I really think they
should not be lured again, in case the opportunity represents itself.
They should look for other means of making money despite the economic
recession currently facing the country.
And a big lesson for all is that people should learn to be open, as much as possible, to those they could trust.
I
kept wondering why a very close friend of mine of many years should now
be crying wolf now after the bitter experience when I was never
consulted before deciding to join and invest in the scheme ab initio.
Government
should do more sensitisation of the citizens on the dangers that could
befall them whenever they are confronted with issues that concern
financial intelligence and breach of public trust.
It is only
hoped that MMM would afford its depositors another opportunity to have a
rethink. It’s just a matter of days for that to be or not to be!
– Kupoluyi writes from Federal University of Agriculture, Abeokuta (FUNAAB).
A
picture taken on December 8, 2016 in Bama, northeast Nigeria shows one
the buildings destoyed by Boko Haram (AFP Photo/Stefan Heunis).