Popular Ponzi scheme, Loom Money Nigeria has crashed and in a bid to retrieve their money, some angry customers have stormed to their office. On arrival to the said Loom’s headquarters in Lagos, they discovered the office have been deserted.
Before the crash of the Ponzi scheme, some Nigerians had already foreseen that something like this is bound to happen, many made references to the great Ponzi scheme of 2017 called MMM and how it left many broke and bankrupt.
Loom has proved that Ponzi’s are not a good way of investing. At the early stage of Loom, Nairametrics had in a report, warned Nigerians of the imminent danger of investing in the fast money making Ponzi scheme.
The Security and Exchange Commission (SEC) also issued a warning to the public, deterring them from putting their money in the scheme. According to Mary Uduk, SEC’s Acting Director General, the Ponzi had no tangible business model as she described the digital venture as a scheme that uses people’s returns to pay for people’s invested funds.
The peer-to-peer pyramid scheme which is patterned similarly as the collapsed MMM is designed in a rotative form in which when a new person is recruited, others are pushed closer to the centre of the circle where they’re promised a payout.
Just like every Ponzi, you pay to get involved, the scheme relies on you to recruit other people, and to part with their money just as you did. It is a cycle, the more people come in, the greater the chances of one cashing out.
Unfortunately, this cycle only benefits the early users as new entrants begin to reduce and sometimes people tend to slow down payment when things begin to go slow, leaving the latter investors to carry the burden of a failed Ponzi scheme.
Why new airlines find it difficult to get certified, fly in Nigeria – NCAA
NCAA does not delay these intending investors as erroneously thought but ensures they follow the laid down stages.
There are hosts of new airlines that are currently battling to get the Air Operators Certificates (AOC), to enable them start operations in Nigeria. They may not get the license anytime soon, as the Nigerian Covil Aviation Authority (NCAA) is bent on crossing all ‘Ts’ and dotting all ‘Is’.
This was disclosed by the General Manager, Public Relations, NCAA, Sam Adurogboye in an exclusive interview with an aviation-focused medium.
While some new entrants have expressed interest to commence ownership of airlines, Adurogboye disclosed that others have reached various stages in the acquisition of their AOCs.
Some of the airlines are NG Eagle, Green Africa Airways, which have reached an advanced stage in its acquisition of an AOC. Rano Air, Northeast Shuttle and a host of others have expressed interest too but are still being considered.
Why the delay?
According to the NCAA spokesperson, the regulatory body does not delay these intending investors as erroneously thought but ensures they follow the laid down stages.
He said, “It’s a good thing to desire to come onboard. The process is a black and white thing. What you need to do in one phase to go to second, second to third, you fulfill it and the team that is in charge work as a team. It is not by the director-general at any particular time. It’s a team of engineers, airworthiness inspectors, medical. It’s a team and nobody can influence the other.”
Below are stages to obtain AOC:
Phase 1 – pre-application phase:
The NCAA will appoint a certification team and process the pre-application statement of intent form (AC-OPS 001). Discussions on all regulatory requirements, the formal application and attachments and any other related issues will take place. This is usually a week’s process.
Phase 2 – It involves a formal application for intending entrant where documents and manuals (including the curricula vitae of key management personnel) must be submitted for evaluation. The minimum timeframe for the formal application phase is two weeks.
Phase 3 – It is a document evaluation phase where the NCAA will review the applicant’s manuals and other related documents and attachments to ensure conformity with the applicable regulations and safe operating practices. The minimum time-frame for the document evaluation phase is three months.
Adurogboye added that the processes seem simple and straight forward enough and these requirements are not there to deter any investor. Contrary to that, they are meant to show capacity for safety for the particular operations to be embarked on.
He stressed that new airlines only come on board once they have fulfilled all the requirements in the five-stage process stating that the most critical of those stages are stages three and four, as the fifth stage is handing over the AOC to the operator.
“If the new airlines are yet to come on board, it means they are yet to fulfill all the requirements because it is a five-stage process and the critical stage is third stage to fourth, fifth. In the critical stage you have to do flight demonstration and that requires you flying to all the routes you want to go, flying it empty.
“If its international routes, you do the same with the whole crew and the NCAA team. You buy fuel and you’re not taking any passengers, you fly them to and fro all those routes that is the stage that is most critical and expensive also. If an airline has not gotten to all those stages, it wouldn’t get AOC,“ he added.
Another reason these investors experience delay is security, which either party do not have control over. This is when the airline is being referred and hand over to security agencies for checks, a stage that can take months or more.
How digital wallets have boosted financial inclusion in Nigeria
Digital wallets are being projected to become the future of mobile payment.
Nigeria’s payment space has taken giant strides towards becoming cashless. This is largely due to the pandemic which redefined the payment experience for a growing number of people and also made various payment services easily accessible.
With the adoption of digital payment methods such as internet banking, mobile banking, Unstructured Supplementary Service Data (USSD), banking cards, etc., mobile payment in Nigeria has been growing steadily over the years.
The advent of digital wallets has further helped to bring Nigeria closer to becoming a cashless society and deepen financial inclusion in the country. Recently, we have seen the emergence of different digital wallets that have been created to bridge the financial exclusion gap, while making financial transactions easier. According to a report by Statista, as at 2020, about 10 percent of digital payments in Nigeria were transacted through e-wallets.
What is a digital wallet?
Imagine your normal physical wallet in your pocket; you keep money in it, and whenever you need to buy something or pay for a service, you take it out, remove cash, and make your payment.
A digital wallet, or e-wallet, serves the same purpose as your physical wallet but in an electronic form. Digital wallets allow users to make cashless transactions when shopping online, making in-store purchases, paying bills, sending or receiving money, etc. with their smartphones.
What they are saying?
In a telephone chat with Toyosi Yusuff, a Marketing & Communication expert in one of the leading tech companies in Nigeria, he stated that there had been increased adoption by upwardly mobile, tech-savvy Nigerians—especially those between the ages of 18 and 26 years.
He emphasized that e-wallets had helped tremendously to manage online spending. While speaking on the challenges, Yusuff stated that trust was still one of the biggest challenges to the adoption of e-wallets in Nigeria. “Young Nigerians are still unwilling to risk their funds with ‘unstructured’ fintech companies,” he said.
Digital wallets in Nigeria
Here are a few digital wallets available in Nigeria:
Paga: Paga is a mobile payment company that enables people to digitally send and receive money by creating simple financial access for everyone. Founded in 2009 by Tayo Oviosu, Paga acts as a mobile wallet where any user equipped with a mobile device can conduct transactional activities using their device. With Paga, customers are able to deposit and save money, purchase prepaid phone credit, pay utility and cable bills, and make payments to retailers. Paga dominates the Nigerian e-wallet platform with over 17 million customers. It also offers basic banking services such as savings accounts, wire transfers, and merchant services.
Wallets Africa: Wallets Africa lets users send and receive money, and make payments through their phones. Users can pay directly into bank accounts and pay utility bills in Nigeria from the app or website.
Founded in 2016 by John Oke, Wallets Africa also lets you create a virtual dollar card on their platform. These dollar cards can be used elsewhere for various kinds of payments, mostly international payments that may not be possible with local cards. It gives users a unique transaction experience and makes financial services more accessible to the under-banked.
GetBarter: GetBarter helps users to easily send and receive money instantly at no cost. Users can carry out bills payments directly on the app. It also allows users to create a virtual dollar card and a gift card for international transactions. GetBarter is owned by Flutterwave, a payment platform.
Chipper Cash: Chipper Cash enables cross-border payments and money transfers within and between different African countries. Besides money transfer, it can also be used to pay bills (cable TV, internet, and electricity) and purchase airtime. Launched in 2018, the company offers mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa, and Kenya. Chipper Cash has over 3 million users on its platform and processes an average of 80,000 transactions daily.
Why this matters
- E-wallets are inherently more secure than physical wallets containing cash and debit cards that could get stolen or misplaced, thereby causing great distress to the owner. Also, your phone has security measures like passwords and fingerprint scanning to prevent other people from accessing it. Furthermore, the financial data carried in your digital wallet is itself encrypted.
- The emergence of COVID-19 has made digital wallets the best way to go cashless in today’s world, as they are easier to use than traditional payment methods. One can easily perform transactions from anywhere by using a smartphone, tablet, desktop, laptop, or other similar devices.
- Though mobile payment is still an emerging market, the future of financial transaction is mobile, and more people are rapidly adopting this trend. With digital wallets international transactions could be made less cumbersome, currency conversion during the transaction will be easier, and it is less prone to fraud.
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