Mixed reactions as Nigerians embrace ponzi sheme likened to ‘MMM,

Barely two years after the popular Ponzi scheme, Mavrodi Mundial Moneybox (MMM) went under many who lost their investments in the scheme vowed never to get involved in any form of Ponzi again.

However, some Nigerians are taking to the internet to woo more people to take part, especially on WhatsApp with individuals creating their own WhatsApp groups such as “Preye Loom”, “Catherine Loom”, among others.

“Loom Money Nigeria” is a peer-to-peer pyramid scheme that follows the same pattern as the collapsed MMM.

Organisers of the ponzi scheme have asked people to invest as low as N1000 or N13, 000 and get as much as eight times the value of the investment within 48 hours.

Unlike MMM, where there is a website and its founder (late Sergey Mavrodi) is well known, the promoters of Loom are elusive while the pyramid scheme operates via closed groups mainly on Facebook and Whatsapp.

British newspaper, Daily Mail had reported in April that ponzi schemes resurfaced online all over the world, with different names such as “Loom circle”, “fractal mandala” and “blessing Loom”.

How it works

The scheme which was first reported in the UK, then by an Australian media outlet, ABC News (Australian Broadcasting Corporation) as a scam after it had gone viral in Australia, commenced in Nigeria recently.

The first step of the process is being invited to join a WhatsApp group chat, usually by a friend or relative. Then you are asked to ‘invest’ N1, 000, N2, 000 or N13, 000 with a promise that you will make eight times the amount back once you recruit new entrants.

After you have paid in the money, you are asked to invite at least one person to join the system.

There are four levels in Loom Nigeria – Purple, Blue, Orange and Red.

Each time eight people join the loom, the person in the centre (Red) will get the target amount and leave the group.

The loom will then split into two groups. The top half and the bottom half become the new looms and everyone moves into the next level (Purple Level – into Blue Level – Into Orange Level) and the cycle begins again.

The more people you manage to add to the circle, the quicker the movement of it, and thus, the easier it will be for you to make your chunk of ‘easy money’.

The basics are that you get eight times the amount you “invest.” If you invest N1, 000, you get N8, 000; if you invest N2, 000, you get N16, 000; and if you invest N13, 000 you will get N104, 000

Mixed reactions

“I joined the group on Saturday and I cashed out N16, 000 on Sunday, Loom is real,” said Rose, a phone outlet attendant.

She said she is presently investing for a friend of hers. Once she cashes that out, she will do another round for herself again.

Another beneficiary, Gbenga Ojo, said he joined the group on Thursday with N1000 and cashed N8000 out that same day.

“I have presently invested N2000 in three different groups hoping to cash out soon,

“Even if it crashes like MMM, I know I did not lose anything,” he said.

While some Nigerians are skeptical of joining the money doubling train, some are sure they will not because of their past experience with various Ponzi like MMM, Twinkas, Charity, Zar Fund, Ultimate Cycler, Get Help Fund amongst others.

Mrs. Odunayo, a government school teacher, said: “Even though I didn’t lose more than one thousand in MMM, I don’t think I can do any other ponzi.”

She said even if she would do, she would not invest more than a thousand naira

Also, Felicia Happy, a police officer, said she will never invest her hard earned money in any Ponzi scheme.

“I cannot invest in any of these Ponzi stuff. Even when MMM was thriving, I did not think it twice, because I believe the day I put my money in that is the day it will crash.”

Meanwhile, the management of the global Ponzi scheme, Mavrodi Mundial Moneybox (MMM), had shut down of operations of the scheme in March following the death of the founder, ex-convict, Sergey Mavrodi.

The scheme, which collapsed over a year ago in many countries including Nigeria, has been a subject of controversy globally.

Mavrodi launched his controversial scheme in 2011 and it crashed in Nigeria in December 2016; with billions of naira belonging to Nigerians trapped in the scheme.

Although the scheme announced a comeback in 2017, it could not launch operation before the renewed enthusiasm among its members fizzled out.

Over three million Nigerians reportedly lost N18 billion to the MMM after its crash was finally confirmed in 2017. This was after the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) warned Nigerians against participating in the scheme.