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Recently, I was invited to join MMM. From the pitch I got, (and according to Wikipedia), MMM is publicized in Nigeria as a “mutual aid fund where ordinary people help each other”. How it works?

Put in some cash (ensure it’s disposable cash, not your capital for business or anything), and you will be paid it plus 30% after 30 days. Ah, what a tidy relief package for Nigerians in this recession. Anyone could do with a little help, this is not a Ponzi scheme, never mind the events in Russia* or the clampdown in South Africa. They’re just persecuting the founders.

The scheme appears beneficial when you consider this explanation on the surface. There’s nothing wrong with a collection of people pooling their money and issuing such out to each member in a systematic way. This is how thrift collections work. The difference here is that people participate because they expect to gain a sort of interest accrued for investing or lodging their cash–not from secondary investments from the funds they receive but from the pool itself. I would have nothing against this but for one gnawing question: where does this interest come from? The answer: From other folks who put in their own money also in hope of gain–that enthralling 30%.

But concluding that way doesn’t tell us the truth about the source of the 30%. It is indeed income from labour and businesses, from salaries and loans secured by active or intending members. It is indeed a pyramid, a chain scheme sold marvelously with the right message, “the participants just help one another”.

I cannot ignore the negative reports about the foundations of this scheme in Russia (perhaps, only because I have not tasted the 30%.) Aside the familiar underpinnings of the work of masterminds exploiting a season and a mindset of a people driven by greed or bound in dire straits, the negatives for me lie in the expectation of gain from doing almost nothing–either directly or by extension**, which, sadly, is the very appeal of the venture:

The allure of the scheme is a distraction for any professional, anyone striving to master a craft or trade. The mechanic, carpenter, computer technician, doctor, tailor, trader will gradually cease to provide us their very best services because of an all-consuming focus on the proceeds of an ‘investment’ which requires no exertion or creativity or productivity on their part.

Then we will sink deeper in this consumer-centered culture we find ourselves. Buy, buy, buy… more money to spend on whims. The guys who service our desires will continue to enjoy their trade surplus over us.

Inflation. As the quest for easy money draws more people in a local government or town away from their occupations, the ones which remain will inflate their rates in providing such services. It will not be only out of envy or greed but because of the mechanisms of demand and supply. As the demand for their still reliable service increases, the price at which they provide such will invariably increase, too.

The timing of the scheme’s popularity presents a dilemma. When the times are hard,  a tremendous amount of effort is required to swim upwards against the forces of poverty, to labour and produce, to invest one’s energies in ventures that translate to value. Unfortunately, this is when the people, now distracted, go after easy schemes, gambling, and sports betting.

Like it is common in life, the line between black and white splits up into many fine lines of diffracting greys. I wouldn’t need a lot of common sense to acknowledge that it has helped someone take care of important bills–some school fees or hospital bill. Even I most probably have benefited indirectly from the proceeds of MMM through someone actively engaged in it. My aim is not to extract myself from this whole thing but to present a case, a possible note for anyone as he considers the gains of MMM against the impact on the sustainable prosperity of our society and nation, of each of us. Surely, there are many people making a lot of money from this scheme, but there will be many more losers at the end. And it might just affect all of us. Should we allow this seemingly profitable indulgence to sabotage our future? Each of us must decide for himself.


*The infographic in this report tells a lot.

**People who loan others money for business seem to also obtain returns for doing next to nothing. If you think about it, you will realize they do a lot in a secondary way. They provide the funds that others with ideas use to keep advancing commerce, technology, and industry in our world.

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