In this story there was a very poor sad little boy. He was sad because he was poor and no matter how hard he tried, he couldn’t figure out how to make money quickly. One day, he went to a market, where he met a man that promised to do the one thing he couldn’t do, make money like it grew on trees. He called himself a money doubler, and our dear Akin believed him.
At first the money doubler asked for one naira. He said that he’d somehow turn it into five naira. Akin had his doubts but he decided to believe. After all, if it all went to shit he’d only lose a solitary naira. As luck would have it, the following week Godwin the money doubler came through with the five naira. Akin was ecstatic. He was so pleased that when Godwin asked for six naira so that he could turn it into thirty naira, Akin said, “why not” and gave him six naira. Like clockwork, the following week Akin went to the market and saw Godwin standing there with thirty naira.
The next time Akin saw Godwin he gave him N100. It was difficult to put the sum together. He borrowed from friends and fools and anyone that would listen. He expected N500 back, but the next time he went to the market Godwin was not there. He had disappeared.
I remembered this story when I heard about MMM Nigeria. Money making magic on a website. A dream wrapped in optimism and a severe departure from reality and common sense. In the scheme, users were promised 30% month on month gains made from nothing. To get involved you sign up and offer to help another user who is trying to get their money out of the system. After your desire is registered by the system, you make a bank transfer to the person that you offered to help online. Your help earns you a virtual currency called Mavros. After 30 days you can claim your mavros with the 30% interest added to it, and it will be transferred to you by another user looking to get into the system.
It will only work for as long as more money is poured into it. The moment this pool of money dries up, everyone that’s contributed money and hasn’t pulled it out will lose it. It’s a system with a fatal flaw; destined to fail from the moment it begins. It is possible to play the game and win, but it’s like the rapture or death. You know it’s coming, but you don’t know when.
Yesterday, MMM announced that operations would be frozen for a month because there is panic in the system. They said “the system is experiencing heavy workload.” They blamed this on “the constant frenzy provoked by the authorities in the mass media.” MMM plans to return on the 14th of January but it will probably fail on that day. Users are frightened that what they’ve heard about it being a ponzy scheme is true. One user, Olawale Quadri said on twitter, “This is what makes the public say it is a scam. I need my money and you are just doing as you wish.” Come January, people will withdraw from the system on an unprecedented scale, but it’s likely that there won’t be any new users to contribute and that will be the end of it. Chances are that it will go the route of its South African counterpart which failed and was forced to start over.
It is unfortunate. My boss told me of a friend of hers who lost his entire pension to MMM South Africa. When stories like that circulate it is hard to say I told you so. The only thing to do is empathise or sympathise. It won’t get anyone their money back but it’s infinitely better than mockery. The year has been hard. The recession continues to bite. This Christmas will be one of the bleakest in living memory. Companies that once threw parties are not, and the bags of rice that were once given out to all members of staff have been reduced to half bags or disappeared altogether. Be that as it may, there’s a lesson in all of this: anything that sounds too good to be true usually is.
This morning, MMM changed its tune. They called their previous statement a google translate error. “Please forgive Mavrodi (the founder), you know he doesn’t speak English. Many words were probably lost in translation.” They say that all they meant by the freeze was that users would have to wait 30 days to withdraw any money put in.
I for one remain skeptical and wary.