MMM: The money spinner that stings
It was regarded a trivial issue when the Marodi Mondial Moneybox (MMM) Nigeria sprang up in November 2015. But barely one year after, the self-income generating platform, as some participants describe it, has sparked debate across the country.
Mixed reactions have trailed the scheme in the past two months in Nigeria, as it gained more ground, capitalising on the recession. Some people, including public officials and agencies feel MMM Nigeria is the next biggest fraud in the country this year but those who are members of what they say is a community, are very happy with the progress and yields.
The Central Bank of Nigeria (CBN) has warned Nigerians against the scheme for fear of falling victims of fraudsters, with attendant losses in the already scorched economy.
CBN spokesman Isaac Okoroafor on a radio programme in Abuja said the financial houses are not licensed and as such their operations were not under the regulatory purvey of the CBN.
He said: “We have witnessed this before in this country. People will promise all sorts of things and disappoint leaving several people helpless.”
He advised Nigerians who have excess money to invest to buy Treasury Bills or go to discount houses licensed by the CBN rather than roadside places where they are not protected by any law.
The National Assembly (NASS) also lent credence to warnings and further directed the Economic and Financial Crimes Commission (EFCC) and the Department of State Security (DSS) to investigate the scheme and possibly clamp down on the promoters in Nigeria. How it all started globally The scheme operates in a Pyramid method of financial games most often called ‘Ponzi’. It was initiated by Russian entrepreneur, Sergei Mavrodi, articles’ search on Google have shown.
A Ponzi scheme (also a Ponzi game or a Ponzi) is an investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned. The scheme type is labelled after Charles Ponzi, who became notorious for using the technique in 1920, it was gathered.
The Russian company started in the 1990s but was shut down by the Russian government for various reasons, including being perceived as parallel with the conventional financial system. Reports said Russians lost about $10 billion in MMM business concept when the site went down.
According to the Networking Eye, an Indian-based website that monitors the activities of many social networking markets, in 1994, when MMM was at its peak in Russia, it reported dividends of 1,000% in a year. Many people became interested in it after this and invested much.
With the success, imitations reportedly rose just as the Russian authorities on July 22, 1994 closed the workplaces of MMM for tax evasion and many lost their hard earned money in it. When Mavrodi was pressured to return the monies invested, he shifted the blame to the Russian government who shut down the operations and that the people of Russia, should ask the government not him.
He was jailed for tax evasion a month after but was assisted by his growing number of members who felt he was innocent. He started few more such concepts but was later arrested in 2003.
Mavrodi was pronounced guilty of scams and was given about five year jail term in 2007, but was released shortly as he had already been in detention.
Determined to move on, he started the MMM-2011 and began connecting beyond Russia to about 118 countries with each country having identification such as MMM Nigeria, MMM Ghana, and MMM South Africa. Soon, others sprung up operating in similar ways. Some include the PerDay50.com, helpinghands.us and GinnyBox.com.
The ideology for operating MMM
Virtual records available at its local website, http://mmm-nigeria. net/ indicate that Mavrodi is upset with the global financial system describing it as a fraud where ignorant people (depositors) at banks are ‘legally’ looted.
It claimed that MMM is a community, in which people help each other for free, and absolutely consciously, they transfer money directly to each other, from one bank account to another, without any conditions, guarantees and promises.
The scheme has no central bank account, no other activity in any form. “There are only millions and millions of simple participants, simple private persons. And their bank accounts,” it stated.
MMM experts in responses to legality questions on their website said the scheme only exposes the secrets of banks to make people see the reality by providing an alternative to the banks. “Today you help and tomorrow you will be helped” is the main principle of MMM, the site posted.
Our reporters gathered that Mavro is the virtual currency that is used by members in the community. The platform does not take cash in any form from people. What they do is to buy and sell Mavro with Nigerian naira by depositing the money to the creditor’s bank account.
Daily Trust on Sunday interviewed one of its ‘Guiders’ operating across Nasarawa State and Abuja.
Mr. J. Ochigbo 100+ (not full name) who has earned more bonuses for guiding new participants gave an instance of how the scheme works. The young graduate of Microbiology said one has to register and buy Mavro from the MMM Nigeria through a person who is already a part of it (Guider) with N1,000 and above equivalent in real local currency.
The member will get 30 per cent interest on the Mavro virtual currency for 30 days. After some days, he will be asked to make an online transfer payment to people who are given the currency. After successful buying of Mavro with real currency, the member is locked into the system.
After the 30 days, such member can request to sell his Mavro and then provide bank account details to get his capital, the 30 per cent interest and a $20 equivalent bonus for first timers. The cycle of reinvesting continues at the discretion of the member on a monthly basis.
While Mr. J. Ochigbo 100+ said the Nigerian version started in November 2015, MMM global site claims to have presence in 118 with fresh intakes to include Ghana, South Africa and UAE. “Barely one year into it, the scheme now has about 1.9 million Nigerians participating already.
How not to lose on MMM Nigeria
The Guider who said he had supervised over 900 members directly under him gave some hints on how not to lose on the scheme. He confessed that there are risks attached to everything in life and that not taking risk itself is also a risk.
He said: “There are certain risks attached to it that could make one lose money. One of such is lack of adherence to the 48hour deadline of uploading the transaction payment detail (Teller). Fraudsters could upload fake tellers and credit alerts to unsuspecting members awaiting their alerts after 30 days.”
Opposition mounts clampdown threats
While the clampdown reigns, many perceived Nigerian participants are taking to the media to oppose the move by the authorities to cut short their means of extra income in a recession-stricken country.
The House Representatives had on Wednesday called on the CBN and security agencies to move against the scheme after the Chairman, House Committee on Telecommunications, Mr. Saheed Fijabi, raised the point about the growing popularity of the scheme locally. Barely 24 hours after, many participants who spoke on the Rhythm 94.7FM, Abuja’s MidMorning Cruise programme blamed the lawmakers for failing to make laws that would encourage single digit loans for enterprises.
Majority of those who called-in opposed any move to clamp down on the scheme. A participant who calledin said the scheme was transparent enough, but warned participants never to invest their life savings in it. over
Deborah, another participant said she has become much more empowered as she gets N35,000 every month through the scheme, indicating a nod for MMM.
Meanwhile, Ochigbo 100+ in his reaction to the clampdown threats told Daily Trust on Sunday that if the CBN knows its role, it would not interfere with the mutual fund community which is not a business entity and is completely virtual, engaging only private individuals.
“From this scheme, many persons have testified of how they are paying their bills with the little extra earnings they make every month simply by carefully following the rules,” he said.
Another participant, Mario Ali who spoke to Daily Trust on Sunday from Kafanchan, Kaduna State, said the scheme required just an internet savvy person and his communication gadgets to work.
He said the ploy to clampdown on the scheme won’t succeed as that was the initial fate during the introduction of the zero interest banking (takaful) which opposed taking or giving ‘interest’ the way conventional banks do.
The social media platform, Facebook, is also burning hot on the issue. Daily Trust on Sunday checks on Facebook indicate that there are 62,054 persons in Nigeria that ‘Like’ the MMM Nigeria Facebook page.
Many have posted testimonies of what they have made from the system just as others lament the hitches they experience. Participants meet hurdles! Although there are many who are quite happy with the scheme and earning money, some participants may have had some hitches in clutching their share.
Brendan Peters in a post at the MMM Nigeria Facebook page said: “I am disappointed in MMM; I GH (a code for eligible payment after 30 days of pledging) and for almost two days now they have refused to match me with another participant. What kind of nonsense is this???”
Peters who tried to reach his guider for intervention said his phone number wasn’t connecting. However another participant, George Adugbo attempted to help, saying if bank account details are edited by a participant, it could take two weeks to be acknowledged. It’s a standing rule!
Peters and another, Testimony Kamsi Ogwu, admitted this error. Another unique challenge is matching a participant with another member (payer) and compliance level. Reeta Chucks in her post said: “I have been matched twice but nobody is paying up now. This is the third time and the person hasn’t even PH (pledged) yet over one week. I ask for help! Is it that people are leaving the system?” she asked.
Wrong account numbers could make you lose a fortune, a post from Azuh Unegbu on implied. “I tried to transfer money to the four accounts sent to me but the transfer could not go through because bank account details were wrong and I called the participants concerned but their phone lines were either switched off or they gave wrong numbers,” he said.