Despite strict warnings from Central Bank of Nigeria (CBN) and the Nigerian Security and Exchange Commission (SEC), the trending online investment scheme tagged "MMM Federal Republic of Nigeria" is growing day by day and according to research by 042express.com the scheme has recorded over 1million members and more.
A quote from a Central Bank official, Mr. Okoroafor said: “These people always come with very interesting propositions. These are fraudsters who are just out there to collect people’s money and run away as soon as they hit their target.”
The MMM, according to information on its website, is a trending financial scheme which promises to create a community of people providing financial help to one another on the principle of gratuitousness, reciprocity and benevolence. Registered members help each other by providing a certain sum of money (as ordered by the operators of the scheme) and such paid amount is expected to yield a 30 per cent increase at the end of the month.
At any month end, members could withdraw their invested amount as well as the added interest through a similar means of being paid by another participant. By operation, the scheme has no central system or account.
However, SEC, in a recent statement on its website, said, “The attention of SEC, Nigeria has been drawn to the activities of an online investment scheme tagged ‘MMM Federal Republic of Nigeria (nigeria.). The platform has embarked on an aggressive online media campaign to lure the investing public to participate in what it called ‘mutual aid financial network’ with a monthly investment return of 30 per cent.
“The commission hereby notifies the investing public that the operation of this investment scheme has no tangible business model hence it’s a Ponzi Scheme, where returns are paid from other people’s invested sum. Also, its operation is not registered by the Commission.”
Nigeria's current economic crisis has caused many citizens to turn to MMM as a means of livelihood.
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A recent survey by the Guardian revealed that virtually all participants in the scheme have benefited from it, thus making it very difficult for them to quit despite the red alert of SEC and CBN
One of the participants, Ata Efe, who was apparently marketing the scheme, told The Guardian that she reaped N73,000 (30 per cent interest and extra membership bonus) having invested N50,000 in her trial month. She said many of her friends had been participating in it, adding that one of them recently acquired a N1.2 million plot of land through the scheme.
Maryjane Okojie, another resident in Asaba, acknowledged the warning of SEC but dispelled any possibility of quitting the scheme, which has given her a cumulative gain of N200,000.
She said: “I suspect that this may turn out to be a scam someday, but with the current economic situation, I cannot stop investing until the system crashes.”
The gains of the scheme may be the major reason for participants not heeding the fraud alert of SEC and CBN.