Side Hustle: MMM

To say the MMM train is huge in Nigeria is an understatement, I even dreamt about it last night. I am not even joking; I had a friend call me before bed time asking my thoughts on the scheme. She is currently serving as a corps member in one of the local government offices in Lagos.

After hearing from her colleagues that salary would not be regular, she was trying to prepare herself and invest. The economic situation in Nigeria took a turn for the worse, and this is not news for any Nigerian. Everyone I know has started looking for a plan B, looking for investment opportunities, cutting down costs and all that. Out of the blue came MMM, MMM is a platform which in summary claims to operate a mutual aid programme requesting participants to provide money to others and promising returns of 30% of such monies after 30 days. This sounds like a great idea but why are people calling it a Ponzi scheme? What is a Ponzi scheme?

A Ponzi scheme (also a Ponzi game or a Ponzi) is a fraudulent investment operation where the operator, an individual or organisation, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.
Initially the promoter will pay out high returns to attract more investors and to lure current investors into putting in additional money. Other investors begin to participate, leading to a cascade effect. The "return" to the initial investors is paid out of the investments of new entrants, and not out of profits. Often the high returns encourage investors to leave their money in the scheme, with the result that the promoter does not have to pay out very much to investors; he simply has to send them statements showing how much they have earned. This maintains the deception that the scheme is an investment with high returns.

Many people have tried to get me started on this MMM business, and I know people who are benefiting from it right now but honestly it is not something I can put my money in. I remember in the late nineties there was something very similar that my mother got involved in, it had a tree or ladder or something that showed how high you were rising and how much you were entitled to before you would exit the cycle. I remember my mother never getting that money, and that has stayed with me. I applaud the brave people who got in on this early and those who are reaping the rewards, but the truth is that this would crash one day.


However, business is always a risk, and I hope now with our economic situation more people would be financially savvy and allocate their resources wisely. If you are still looking to join MMM, ask your neighbour or someone sitting next to you in Church. I can assure you that you would be signed up in fifteen minutes.