By Abibat Aliu
The social financial network has become the order of the day, especially among the youth. Nigeria’s current economic crisis, retrenchment of staff, and the high inflation rate have even promoted the scheme more. The Ponzi scheme is a community of mutual financial help where members help each other financially. Many Nigerians are aware of one financial scheme or the other or even have friends or relatives as participants. The most common Ponzi scheme in which the youth was rapidly involved before it collapsed was MMM, Givers forum, Ultimate Cycler, and Twinks. Some of these financial networks operate in form of Ponzi schemes like MMM and Givers forum. Participants get a certain percentage of the money they are willing to provide within a short period. Participants of this scheme benefit financially within a short period and become financially buoyant. Even amid the so-called recession, flamboyant spending by beneficiaries of this scheme has become noticeable. Because of the level of hardship in the country participants of this scheme are willing to take the risk involved.
The most dominant social financial network is MMM. Participants of MMM are warned to participants with spare cash and there is no guarantee which is something no scammer will ever tell you. The scheme was launched in Nigeria in the year 2016, through the website with a business model claiming to pay a 30 percent return monthly through a social financial network. It’s slated clearly on its website: “MMM is not a bank, MMM does not collect your money, MMM is not an online business. MMM is a community where people help each other. it states further: “MMM gives you a technical platform which helps millions of participants worldwide to connect those who need help to those who are ready to provide help for free. Another website, www.gurus gives insights into how MMM works.
In this Ponzi scheme, we pledge to donate our spare money to members who need it. We do so by logging into our MMM account to pledge. We join the queue of people who made pledges “we only make pledges. We don’t gather our pledges to give to one person. In MMM there is no central account (no bank account which all our pledges are paid into). Members transfer directly to each other.
The website further explained that if a member in the community who has already made a pledge to provide financial help to another member and has fulfilled his pledge falls in need of help, if it’s your turn on the queue for providing help, you log into your office, you will receive the details of the person to provide financial help to. As soon as you pay the money directly into the bank account of the person that needs the financial help and that person acknowledges that he has received the money, the helper then qualifies to receive help at a later date.
The scheme has both positive and negative effects on the youth in general. Negative effects include laziness work and flamboyant spending without using the scale of preference. The positive effect is financial freedom to an extent; at least it eases their sufferings. Those that are majorly against this scheme would be the banks since they would have less fixed deposits while individuals against these schemes could be those already financially buoyant or those whose morals are against easy and quick money schemes.
Some underpaid workers even leave their jobs without a second thought since the scheme is much more beneficial to them due to fast gaining financial freedom from poverty. Till this moment 90 percent of the participant did not recover their money after the scheme crash. Likewise, another similar scheme.
