MMM: The risks Nigerians are taking and other things you need to know

Despite Security Exchange Commission and Central Bank of Nigeria’s warning that Nigerians should steer clear of the Mavrodi Mundial Movement (MMM) scheme, the number of subscribers have continued to climb and the scheme has become the current number one investment for many Nigerians in recent times. The scheme pays over 30 percent on investment to subscribers in one month while giving them numerous bonuses for bringing in new investments.

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This of course looks like the ‘wonder banks’ of the 90s that crashed with billions of Naira belonging to investors disappearing with them.

Yet Nigerians continue to put their fate in MMM. It is now even being preached in some churches as a good source of investment.

A look into the scheme has revealed the reason why the scheme is working and why people are very much attracted to it. It also uncovers flaws and reasons why it may crash.

The Mavrodi Mundial Movement was instituted in Russia in 2011 by a mathematician and statistician named Sergey Mavrodi. He had created an algorithm that allows subscribers to have a huge purse of funds where they can draw from as long as new subscribers are willing to fund whatever was taken out.

It is more like a Ponzi scheme or a pyramid scheme but with a twist. A Ponzi scheme collects funds from investors and use the funds of new subscribers to pay old subscribers and when there are no new subscribers the scheme breaks down. Same goes for Pyramid schemes, but MMM is bit different.

How MMM Works
MMM organises interested participants on a networked platform. It matches people who are willing to assist or fund others with people who need funds. The amount you are able to ask for in funding depends on the amount you are able to assist people with. It allows one to give out fund to people with the assurance that they will get assistance when they request for it.

MMM simply make new ‘helpers’ to transfer money (help as they call it) to other people who had provided help previously to earlier participants and the circle continues. But it is not really a circle and does not go round, instead it is a pyramid that keeps going up and this may have consequences on the long run.