MMM: Mokú Mogbé Mòdáràn!

Today was crazy. (Thank you, Shereen). Scratch that – the past few weeks have been crazy. I have been wanting to write about the MMM rave for a while, but couldn’t find the time – so I have had to be content with liking other people’s posts and dropping sarcastic comments here and there on Facebook. Right now I need a break from writing recommendations and thinking about foreign exchange, so I have decided to finally write this.

First some context for the uninitiated. MMM is a Ponzi an investment scheme that offers 30% returns on a monthly basis. Yes. You read that right. 30% monthly. To help put that in perspective, if you invest provide help of N100,000, you can expect returns to get help of N130,000 in thirty days. If you leave this N100,000 in for twelve thirty-day cycles, it becomes N2.3 million at the end of the period. That is a 2330% annual rate of return!

Beats me why Dangote is building expensive plants to manufacture cement when he can simply invest provide help of a billion in MMM.

But there’s no point beating me or beating about the bush. Dangote builds plants because making cement is an actual business that employs people to make a product that is in demand, feeds their families and funds their dreams, generates profit, and (hopefully) pays taxes. MMM is not a business. Doing nothing providing help to people in return for 30% interest within thirty days is not a business. MMM is a Ponzi scheme.

This is not news. A simple Google search yields enough information to reach the same conclusion. (If you don’t agree that MMM is a Ponzi scheme (or other variant), stop reading now). MMM lost so much money in Russia in the 90s that even the founders, Sergei Mavrodi and his goons, don’t know how much was lost. Russia is too far. MMM has recently run into troubledwaters in South Africa and Zimbabwe – as all Ponzi schemes eventually do. (Members of MMM Nigeria don’t accept this, but facts are facts whether we believe them or not).

A 2330% annual rate of return seems ridiculous to the averagely sensible human. While a business may sometimes hit a jackpot, it’s simply no mean feat to grow your capital by 30% month-on-month. Plus – we have had these before. Wealth Solutions and Pennywise wrecked many people financially in the mid-2000s. Why then are many Nigerians investing in providing help through MMM and defending the scheme on social media?

1. Desperation. I’ll be the first to admit there are many desperate people in Nigeria: young men and women who cannot find meaningful work, or who earn barely enough to cover their basic needs. These people have a widespread feeling that the government has failed them, and the brains behind MMM have smartly presented it as an alternative to the global economic order and it’s 'unjust financial system'.

You already don’t have enough money. Why keep it in a bank when you can invest it with us provide help and earn 30% on it in thirty-days?

In my opinion – desperation is never a fitting excuse for participating in a scam.

2. Greed. I am pretty shocked when I find comments by people who know it is a Ponzi scheme, who know it will all end one day with a significant number of people unable to retrieve their investments spare money, yet who find a way to justify their participation. Some say they have recovered their initial capital and are only investing with the returns, others say they are only investing spare money they can afford to lose. Regardless of the source of the investment funds, these people are actively looking to double their investments in x months without doing any work simply by providing help. I can’t think of a better definition of greed.

Forget about this help bullshit. Get Help = Make a Withdrawal!

Oh, and it’s not okay to be greedy because everyone else is greedy. What is not good is not good.

3. Poor education. From what I have read in comments on Nairaland, the MMM website, and on Facebook – the average MMM member either has no clue what is really going on, or has willfully chosen to ignore all the warning signs in the hope of cashing out. For example, they defend the risk of MMM crashing due to panic withdrawals by throwing around descriptions of a bank run without seeming to understand the concept of Fractional-Reserve banking and Cash Reserve Ratios, and more importantly – without bothering to question whether MMM and a conventional bank are bound by similar regulation intended to safeguard deposits.

I believe a good education cultivates the ability of people to think critically and for themselves, and nowhere is the lack of critical thinking more evident these days than in the hive mind exhibited by MMM participants defending themselves on Facebook and other social media. The way they throw around phrases like “MMM pays”, “Long live MMM”, and “our ideology” – you would be forgiven for thinking they were all trained at a central school – or that MMM is a new religion.

Net – MMM is not a business. MMM is a Ponzi scheme. It will crash at some point, and if you must continue to participate – make sure you’re not investing your life savings or borrowing money to invest. AND – please do us all a favor and let us rest. When we say we are not interested in participating in a scam, we mean it.

I’m not interested in puncturing specific arguments in favor of MMM. I have Mofesola Babalola for that, and if you drop your arguments and he is in the mood to respond – maybe he’ll do you a favor and contribute to your education.

Cheers to the weekend, and long live MMM.

Koye.