MMM: Looking beyond the ‘scam’ underpinning (1), by Israel A. Ebije

Nigerians are resourceful, innovative and desperate people. That is why it’s the second country in Africa MMM “wonder bank” scheme birthed and is festering with over 1.5 million participants. The combination of some of the qualities associated with an average Nigerian has made it easy for most of them to turn a blind eye on the possible or looming danger involved in participating in the growing online money making scheme.
The Security and Exchange Commission of Nigeria and the Central Bank of Nigeria have alerted on the implication of losing money to the acclaimed fraudulent online money making scheme. Financial analysts also believe it is a dangerous investment, more so that it has no guarantees, no legal documents signed and no visible business links established except for the cash transfers from and to people who are totally strangers.
The desperation of Nigerians on the usual “get-rich-quick-syndrome” properly aligns with MMM money scheme offering participants 30 per cent on every money invested. Other interests accrue depending on the participants’ status either as a “guider” or as “referrer”. Many Nigerians participating in the MMM online money making scheme confirm they have been liberated financially. Nothing, not even the hard facts online can ever make them slow down on taking possible risks involved.
The chain of beneficiaries of the scheme is endless. Civil servants no longer worry over delayed salaries, jobless Nigerians can now be self employed. Rate of armed robberies and prostitution may reduce, health related challenges on account of poor finance will also reduce. It is even believed that Nigerians will become richer and the percentage of poor drastically contained to its minimal level.
No one is however very certain of the continuity of the scheme. People are just enjoying the ride. With all the seeming impossibility of the scheme having any quantum of longevity, the immediate benefits is considered by many a dream they’d rather not wake up from. The expectation is so high so much that those who dare to cast doubts or announce its crashing in public get badly beaten.
Before the recession, before MMM, there were so many pyramid or ponzi money making schemes in Nigeria. Some are no longer existing, some have however managed to survive. But none has given Nigerians opportunity to be employed, turning little cash to huge financial capital like MMM. Let me therefore intimate on the origin of “ponzi” to posit on online money making schem. Charles Ponzi was a 19th Century swindler who offered 10 per cent interest to investors. He became reputable as a money swindler in the early 20th century.
Other schemes adjudged as dangerous for investors were named ponzi. Haven posited on the bandied alias for pyramid schemes like MMM, it is important to intimate that most “wonder banks” appear real, very plausible, possible and doable, but at the end, they crash.
Let me fetch brief facts on the origin of MMM. It’s a Russian company established in 1989 by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and a friend Olga Melnikova. The initial of their surnames formed the MMM. In the 1990’s, MMM company made more than 40 million people to lose more than $10 billion during Russia hyperinflation period.
No one can confirm if the company, which promised investors a whooping annual 1000% returns was designed to defraud or empower. The result of the crash forced more than 50 people to commit suicide. Sergei Mavrodi, a 61-year-old mathematician and one time member of the Russian parliament, was also a presidential hopeful who has spent a good part of his life trying to find to do “business”. Failing many times with horrendous consequence on investors, he is definitely a man to avoid?
Based on his antecedent, many would ordinarily have been warned that his online money-doubling scheme is going to end the same way all his financial schemes have gone. The truth however is that this time, he may have created a financial apocalypse. His story may have taken the path of Thomas Edison and Abraham Lincoln. They failed many times until they achieved the ultimate ambition of their lives. Has Mavrodi failed his way into the financial innovation of his dream?
His principle of “Providing Help” and “Getting Help” is literarily what the entire racket is built on. Once people on the platform continue to PH and GH, the system continues to sustain itself. Once the platform is not compromised and the “help givers” contribution remain at a constant, compensating each time for those “receiving help”, the chain is expected to remain unbroken ad-infinitum.
The mathematician has indeed created a financial fountain. The pyramid may have erupted into a fountain where exchange of money will continue to flow into channels which in turn will drain back into the reservoir no matter what participants use their “profits” for. Regardless of how many people who might opt out, others will come aboard based on testimonials or “latter of Happiness” beneficiaries are compulsorily asked to right.
Mavrodi may have failed in many things but this time. He may not even make money from the ongoing MMM scheme but it is possible he has created a system that will continue to alleviate the poor. The system might pull countries out of recession. The valid way people can surpass troubled economies is simply by putting money in the hands of its citizens.
MMM pyramid scheme may not have guarantees is certainly an understatement. Business with strong legal framework can crash with loss of cash for investors. Most businesses are indeed laced with deceit. A valid example of how some financial institutions operate was mirrored in a tale of an American merchant who went to India to buy a specie of monkey. He initially bought hundreds of monkeys for $2 each. The purchase continued every week as the price kept increasing. Soon, the worthless monkeys became priced possession.
People started hoarding monkeys all over India. The price per monkey rose to fifty dollars for one. The merchant bought all the monkeys, soon there was none left to sell. Within days, the price of a monkey rose to five hundred dollars for a monkey. Suddenly the representative of the merchant announced he had thousands of monkeys for sale. He sold each for a thousand dollars to the Indians, telling them they will make more money once his master return for the next purchase.
They were sure of making triple sales. They waited for days, months but the merchant didn’t come for the usual purchase, to worsen their situation, the middle man was no where to be found. All they had was the “worthless” monkeys. They have been scammed from the beginning without even realizing it until the suddenly lost all….To be continued in part 2.
Ebije can be reached via: [email protected], [email protected] or


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