Anyone who lives within their means suffers from a lack of imagination. —OSCAR WILDE, Irish dramatist and novelist
Unless you have been living under a rock, you’d know about MMM Nigeria; the most talked about get rich quick scheme in town.
Initially it was whispered among few but now MMM evangelists run amok, you only need to type “m” into Google Nigeria search engine to see that MMM is the most searched word beginning with m even more than money. This got my interest.
What is MMM Nigeria
According to its website, MMM Nigeria is a community of people providing each other financial help on the principle of gratuitousness, reciprocity and benevolence. To participate you need to declare the willingness to “give help” (generally termed PH in the MMM community meaning “Provide Help”), after which your account will be rewarded with mavro (the internal “currency”/scores of the System). Mavros will start growing from the moment of offering the contribution at the rate of 30% per month.
It was created by a convicted Russian fraudster, Sergey Mavrodi along with his brother Vyacheslav Mavrodi, and Olga Melnikova. He was found guilty of running one of Russia’s biggest pyramid schemes in the 1990s, in which millions of people lost their life savings and by at least 50 committing suicide.
A lot of Nigerians have embraced this scheme; friends and colleagues give countless testimonies of how they have gotten huge returns on their money.
And I have been asking myself these questions
- How is value created if no money is invested? Where the hell is the interest coming from? There are no products or service being rendered and hence there is no value created. And since there is no value creation, there is also no real appreciation in investment. Therefore the money investors get from MMM will come from new or existing members that are investing their own money into this program. So demand and supply need to be balanced; the cycle need to continue.
- Won’t demand out-stripe supply at some point? From my study of Ponzi, pyramid schemes, demand would at some point out-stripe supply. Demand in this case being people who provide help (PH), supply; those who get help (GH). Some of the reasons are simple; people are not that gullible to think that the party would last forever, so they would want to hit and run, before the roof collapses. And when this happens, the late entrants and the greedy ones would be caught in the rubble
- How does the guys behind MMM get paid? What is in it for them? Well MMM wants to change the world.
- How sustainable is MMM? It’s hard to see MMM being sustainable. However the key to the survival of MMM is the people. The more people embrace the scheme, the longer it takes before it crashes.
- And yet MMM gives you no guarantee?The guys behind MMM obviously need to protect themselves.
The issue of risk and return of MMM Nigeria
A typical risk and return graph would look like this
Every investment is a function of risks and return; the higher the return, the higher the risk. However the ability to determine and understand your risk appetite is very important in any investment decision. Kindly read the warnings on MMM website before participating.
In theory as long as Nigerians keeping seeking help, the system will continue to exist. Since for you to get help you would need to provide help.
However if fear creeps into the heart of Nigerians the system would most certainly crumble. This is because supply will dry up and the last people who had provided help may probably never get helped in return.
Click here for more information on MMM Nigeria. However tread with caution.