Why Young Nigerians Love Ponzi Schemes
Over the past two decades, pyramid or “Ponzi” schemes have become a staple in Nigeria’s economic and fiscal sphere.
Ponzi schemes, named after Charles Ponzi, an Italian businessman who defrauded a lot of investors in America and Canada is a moneymaking scheme that promises investors unusually high returns on their investment. The concept of a pyramid scheme involves marketing to investors very high returns on their investment through a massive interconnected network where group of investors pool their funds for the benefit on an individual’s payout.
On the surface it is quite obvious that pyramid schemes are unsustainable at best and fraudulent at worst. Failed pyramid schemes such as Mavrodi Mundial Movement (MMM), Yuan Dong Ponzi e.t.c. have reportedly cost Nigerians Billions of Naira.
Chief among the victims of these schemes are young Nigerians, strategically targeted by the Ponzi operators who believe that the younger demographic of Nigerians can be lured and enticed by the marketing and promises of easy money and will in turn, through the use of social media and other online apparatuses widen the pool of prospective users.
Burbles Media interviewed young Nigerians on their experience with Ponzi schemes, here is what some of them had to say.
Saint (m), Ikoyi
“The concept of Ponzi was foreign to me at the time. In my mind I thought I was making smart investments. Although I was naïve, I made over 400 thousand Naira from the scheme. However, I ended losing all that money after reinvesting.
I am wiser now, and have more information, so I can identify Ponzi schemes from a mile away. I am not engaging in it anymore.”
Eno (f), Calabar
“I wanted to make quick money. I was introduced to Ultimate Cycler, by my hostel mates in university. After learning the ropes, I registered myself and some other friends into the scheme. I made over 300 thousand Naira from Ultimate Cycler.
The day after I liquidated my earnings, Ultimate Cycler crashed, my friends and family members were not lucky however, some of them lost their money.
My risk appetite is reduced now and I have a lot to lose so count me out of future Ponzis.”
Goodluck (m), Yaba
“I have mixed feelings towards Ponzi schemes. About five years ago I was involved with multiple Ponzi schemes where I made and lost a lot of money.
If you want my two cents, I’ll advise that if you are lucky and smart enough to game the system then use your spare money to make extra.”
Tony (m), Abuja
“I personally did not participate in Ponzi Schemes, although a friend of mine, registered my number for his own use. I can vividly remember the morning MMM crashed, I was at the NYSC Orientation Camp, you would have thought rapture happened. There was a lot of weeping, moaning and gnashing of teeth.”