Funmi put a call through to Nairametrics last week requesting to get our opinion about the the buzz of the moment scheme “MMM”.
Her curiosity for the scheme increased recently after a colleague asked her for a loan of about N200k. On further inquiry, her colleague confessed that he needed the cash to invest in MMM and promised to pay her back within two months. She insists that rather than loan her colleague the cash, which she might never get back, she will rather take the plunge and “invest” her self.
She claims she is aware that it might be a ponzi scheme but nevertheless wanted to know what exactly the risk were and if it’s at a stage where the pyramid is about to collapse. After all, she quips, if it was illegal then why hasn’t the government stopped it?
This got us also wondering why a scheme, thought to have attracted over two million Nigerians and counting, is yet to be shut down by agencies of the Nigerian Government . This is despite warning from the Security and Exchange Commission and request by the National Assembly that authorities shut down the scheme. Yet the EFCC, SSS, Nigerian Police and all other apparatus available to stop this scheme have failed to do so. In fact sources inform Nairametrics that apprehending perpetrators of the scheme is not high on their agenda. So why is this so?
Our analysts have a few theories that can explain why law enforcement agencies and financial regulators may be unwilling to investigate or even stop the MMM scheme.
No one has complained of losing money
Another major reason is the fact that no one has complained yet of losing money or getting swindled by the scheme. Proponents of this theory believe this is probably why security agents are yet to swing into action. Typically, criminal cases (which this would have fallen into assuming it’s established as a ponzi) are typically investigated after a complaint has been laid by the accuser. If this holds true, then it will be a while before authorities even touch this scheme. More and more Nigerians are increasingly looking for ways to improve their income providing MMM with a massive pool of potential contributors that could run into tens of millions of Nigerians.
No law against it
Legal analysts also opine that there is no clear law against MMM especially as no one has complained of losing money in the scheme. The Cyber Crime Act of 2015 also doesn’t specifically classify as illegal any website use to crowd source money from Nigerians. The Security and Exchange Commission may also not have jurisdiction here as contributors to the scheme are not investing. In fact, they claim on the website that it is “not an investment program”. Without an enabling law or at least one that is close to it, MMM appears to be on a legal sound footing and can only be thwarted legally if someone complains of being swindled.
No Instruction from Presidency
A school of thought believes that the Presidency is yet to give any instruction authorizing an investigation into the scheme. They opine this is probably why the EFCC has decided against making a move despite the National Assembly’s request that they do so. Proponents of this theory believe the president’s disposition to socialist schemes that caters to the poor suggest whomever brings the up may incur his wrath.
They also invest in it
Another wild theory suggest members of law enforcement agencies also invest in MMM. In fact a reliable source in one of the crime fighting agencies inform Nairametrics that a lot of them actually participate in MMM and could have contributions running into millions stuck in there. Closing the scheme down could inevitably lead to the loss of their contributions as such, it is unlikely that they will want to burst the bubble when their cash is still stuck in there.
Stretched
Some analysts inform Nairametrics that law enforcement agents may be over stretched having been involved in various anti-corruption activities on behalf of the Buhari Administration. They claim going after a group of Nigerians who are simply engaging in an investment scheme out of their own free will is a diversion from the more important fight against corruption.
No registered office/bank account
Some also believe the fact that MMM does not have a registered office or bank account makes it difficult for authorities to target. MMM does not operate with a central bank account and only relies on trust and willingness of participants to transfer money to each other seamlessly. In that past, the collapse of ponzi schemes was hastened after authorities froze their bank accounts, trapping contractions made by those at the lower end of the pyramid.
The above theories probably explain why authorities are not so eager to get involved in this scheme. For those who have predicted a fall of the scheme, they might need to wait a while longer as a government induced crash may not be happening any time soon.
How does MMM make its own money if it has no bank account?
It doesn’t make money. It just circulates the money of it’s members, with the some what obligatory one month waiting duration to get 30% interest on the money invested. it pays current members with new cash inflow from new members or current members who bring new funds. It’s just a continuous circle which thrives on the fact that it has more money coming in than going out for now ?
Don’t be deceived. A scheme that generously must have something in it for them
Now comment I support let continew