Depending on its users to pay each other without running a central bank account or physical address, MMM sees registered participants pledge and donate money to other participants when directed to do so by the scheme’s operators. After a month, donors are entitled to receive the donated sum, plus 30% interest, paid by another user.
In a message to its users, MMM says the suspension of operations is because “the system is experiencing heavy workload.” It also blames its disruption on “the constant frenzy provoked by the authorities in the mass media.” Over the past year, as the scheme’s popularity has grown, Nigerian authorities have stepped up campaigns to dissuade Nigerians from taking part in the scheme.
Central Bank of Nigeria warned against committing funds to “fraudsters”. The Economic and Financial Crimes Commission (EFCC), Nigeria’s chief anti-corruption agency, also launched an investigation of the scheme’s operations.
The government’s tactics appear to have had the desired effect as reports suggest that, given heightened risk warnings by the government’s agencies, MMM participants have become hesitant to make payments as directed by the system causing a hiccup in operations. As a result, MMM says its operations “will be frozen for a month.” By extension, participants due to receive returns having paid out money over the past month will be unable to do so.
“The reason for this measure is evident,” MMM’s message to its users read. “We need to prevent any problems during the New Year season, and then, when everything calms down, this measure will be cancelled.” It refers to paying out by users as PH (Provide Help).
But the promise of a return has proven scant assurance for Nigerians with money trapped in the scheme. Taking to social media, MMM participants have requested clarity and complained about the suspension of operations in the typically busy festive season.
MMM’s suspensions of operations in Nigeria is similar to events in South Africa where the scheme collapsed and was forced to start over. In that instance, MMM also blamed the collapse on “persecution” which it claimed was “organized by the mass media” to provoke panic. Similarly, in Zimbabwe, the scheme temporarily suspended operations and slashed withdrawal exchange rates upon resumption causing participants to lose 80% of their investment. It remains to be seen whether the scheme will make a January return as promised, but if it does, there’s a good chance, having faced the prospect of losing their money, participants are likely to be only interested in getting out their cash.
Post a Comment