NNN Nigeria: Another Ponzi Empire sets to out-pay MMM Nigeria
MMM Nigeria suspended payments for reasons bordering on ‘serving’ participants better – barely a week after is NNN Nigeria. NNN Nigeria is promising to out-pay MMM Nigeria by 5% – 35% vs 30%. Question is, are some individuals playing on the intelligence of ordinary Nigerians during an economic downturn.
An investment that offers 35% returns on investment monthly(420% annually) is too good to be true, especially when the best returns from the banks is 5 – 15% annually. The traditional banks have to always pay staff salaries, offset all staff bonuses, pay rents, and always build new branch outlet. A virtual bank(one without brick offices) will not need to pay any of the above, and can invariably return higher margin on investment. But can this justify 360% return annually?
Putting this in perspective, an N500,000 investment in an NNN in January will become N2,100,000.00(profit N1.3 million ) by January of next year. The notorious MMM will return N1.8 million. Compared to a traditional bank investment with a maximum of N575,000.00(profit N75,000) if lucky. The three returns are like a race between a snail and a horse and a cheetah. Now we should not be surprised at so many Nigerians believing strongly in the Ponzi doctrines and willing to herald it to the gates of IDP camps.
What is NNN, and is this type of investment sustainable. Where are the returns coming from? Or are the founders of NNN in Nigeria printing their own monies? NNN like MMM is a Ponzi scheme. NNN, unlike MMM, has no global antecedent, but like a derivation of MMM with some playing on English alphabets – NNN = next-MMM.
According to Wikimedia, MMM was established in 1989 by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova. The name of the company was taken from the first letters of the three founders’ surnames. Initially, the company imported computers and office equipment. In January 1992, tax police accused MMM of tax evasion, leading to the collapse of MMM-bank, and causing the company to have difficulty obtaining financing to support its operations.
MMM created its successful Ponzi scheme in 1994. The company started attracting money from private investors, promising annual returns of up to one thousand percent. It is unclear whether a Ponzi scheme was Mavrodi’s initial intention, inasmuch as such extravagant returns might have been possible during the Russian hyperinflation in such commerce as import-export.
MMM grew rapidly. In February 1994, the company reported dividends of 1,000% and started an aggressive TV ad campaign. An important factor in the scheme’s success was word of mouth, but most of the company’s success came from its extremely aggressive ad campaign.
At its peak the company was taking in more than 100 billion rubles (about 50 million USD) each day from the sale of its shares to the public. Thus, the cash flow turnover at the MMM central office in Moscow was so high that it could not be estimated. The management started to count money in roomfuls (1 roomful of money, 2 roomfuls of money, etc.
NNN, unlike MMM, has no global antecedent, but like a derivation of MMM with some playing on English alphabets – NNN = next-MMM.
Regular publication in the media of the rising MMM share price led President Boris Yeltsin to issue a decree in June 1994 prohibiting financial institutions from publicising their expected income.
The success of MMM in attracting investors led to the creation of other similar companies, including Tibet, Chara, Khoper-Invest, Selenga, Telemarket, and Germes. All characterised by extremely high promised rates of return. One company promised annual returns of 30,000%.
On July 22, 1994, the police closed the offices of MMM for tax evasion. Everyone lost money. In January 2016 the Chinese government banned MMM on the grounds that it is a pyramid scheme, (Ponzi scheme), and it is not registered in the country