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On fraudulent investment schemes

By Editorial Board   |   20 March 2017   |   4:07 am

MMM participants

The regulatory bodies in the Nigerian Financial Services Industry have done very well by calling the attention of the public to high-risk investment schemes/proposals and warning that such investments should not be patronised. A very recent example is the scheme with the scary name: Mavrodi Mundial Movement or MMM for short, which hit the Nigerian market a while ago. The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) separately warned that the ‘Movement’ was a fraudulent scheme that should not be patronised. MMM was collecting deposits from the public without CBN’s licence; it was an illegal scheme meant to defraud unsuspecting members of the public. The scheme had no known regulators, supervisors and/or monitors. Despite the warnings from recognised financial regulatory/supervisory institutions, many Nigerians, of course, still defied the alarm and invested in the scheme. Today, many are licking their self-inflicted wounds.

According to recent reports, from the NDIC, as many as three million Nigerians lost N18 billion in the MMM scheme. The affected Nigerians now know better and may henceforth find the need to heed official warnings from regulatory and supervisory bodies that, as it were, have vast information, knowledge and experience about goings-on in the economy.

Some years ago, there were similar fraudulent investment schemes in this country. The regulators then warned the public to have nothing to do with the schemes and those who defied the warning still have their unpalatable experiences with them till date. Today, victims know better; if only they had listened to the regulators? But will tomorrow be different? The answer depends on what happens from now onwards; and that brings up the question of why people patronise such schemes as MMM and their diverse variants.


Reasons have been adduced for this: get-rich-quick mentality and making money without work syndromes, poverty, laziness, greed, ignorance, illiteracy, gullibility and ‘investor arrogance.’ In fact, against good counsel, some people would say: “I have the right to invest my money as I deem fit.” Such statements, however, question people’s understanding of the roles and responsibilities of government regulatory bodies in the banking and financial services industry. Apart from regulations, they also have, as primary responsibility, the protection of interests of citizens.

In the final analysis, fraudulent investment schemes have been proven to be against the people that patronise them and the nations they operate in. For sure, Nigerians (three million of them) and Nigeria lost the reported N18 billion to MMM. Those who lost their money are likely to become liabilities to their families, communities and the nation.

Meanwhile, the fraudsters have taken the money elsewhere, denying Nigeria huge investible funds that would have impacted positively on the economy. This means, in our poverty, they have made us poorer. This situation must not be allowed to continue. Therefore, efforts should be made at ensuring that Nigerian citizens do not fall prey again. All government organs charged with protecting the interests of citizens must have their hands on the plough all the time and not some times; the case for consistent and constant awareness creation using multiple channels of communication in the various languages of the Nigerian people, is a sine qua non. Ad-hoc communication to the people of happenings in the economy must end and information dissemination throughout the country should be re-assessed to guarantee it gets to all. Building and developing financial knowledge and literacy of the people should not only commence at the primary school level but efforts in that direction should be fast-tracked and sustained.


Telecommunications and media companies must desist from circulating unauthorised and harmful investment advertorials through their networks. The regulatory bodies in the financial system (CBN, SEC, NDIC, PENCOM, NAICOM, etc) must have adequate market intelligence to know when a ponzi scheme enters the market and nip same in the bud. The regulators should also be proactive in issuing warnings to the populace for effective sensitisation.

Past experiences in ponzi schemes in the country should be thoroughly investigated and recommendations made should be circulated and implemented. The government should find ways to strengthen the weak-links in the economy being used by ponzi schemers to enter the country without being detected until they had inflicted maximum damage. Whistle blowing should be encouraged and promoted to detect early, the entry of financial investment fraudsters. Those who have successfully swindled the Nigerian people via investment schemes should be made to face the laws even as Nigerians are brought back to the consciousness of hard work, dignity of labour and earned income.

The country’s legal and regulatory frameworks should quickly be reviewed to block gaps that make possible the creation, development and importation of ponzi schemes; and finally, citizens must be enlightened to moderate their extra-ordinary profit expectations from investments. They should know that investments that promise extra-ordinary returns are usually encased in extra-ordinary risks.




  • peter archibong

    story…watch what happens 10 years from now…a more than mmm woud surface and nigerians would not only forget about the mmm experience but rush it like suya

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