Now that MMM suspended all payments, will the scheme crash in Nigeria – No, it won’t: so don’t panic – panic won’t help anyone. While the administrators of MMM communicated the several reasons for suspending payment on a scheme 3 million Nigerians have benefited from(also becoming 5th most visited website in Nigeria in last than 1 year), the main reason is however lost in the piles of explanations – official and unofficial.
On Twitter at 6:30 p.m. Monday night, MMM Nigeria said interested participants should be cautious and use only their “spare money” – that is, the money you can afford to do without.
“MMM has always advised that you use your #SpareMoney. Use your #SpareMoney and #SpareMoney only. Don’t be unnecessarily greedy,” MMM tweeted.
He explained that most participants would want to cash out their money for the festive period and that would lead to a breakdown of the system as it is a mutual aid community of individuals helping individuals … Marvodi however urged participants not to panic …
Displayed on the pages of participants of the scheme, its founder, Sergey Marvodi explained that the reason for the measure was to ensure the sustainability of the scheme in the New Year and make it better.
He said that the money of participants would continue to grow in the platform along with their bonuses which they would be able to cash out as from Jan. 13, 2017.
He explained that most participants would want to cash out their money for the festive period and that would lead to a breakdown of the system as it is a mutual aid community of individuals helping individuals.
He blamed a “heavy workload” being experienced by its servers and the panic caused by the Nigerian government and media for the development but said it will be back by mid-January, 2017.
He added that it was also a way of ensuring the sustainability of the scheme which has been under a lot of attack from the Federal Government and the media of its collapse in December.
Marvodi, however, urged participants not to panic as the measure in place would only make the platform stronger with better strategies to be put in place as from January.
The Nigerian Security and Exchange Commission (SEC), the Central Bank of Nigeria (CBN), and Economic analysts warned Nigerians about the scheme. The government agencies warned that the same way the scheme has enriched some people, it would throw some into poverty.
While several participants have expressed their disappointments on this new move by administrators of the MMM, stating that the same measure being put for the sustainability of the scheme would lead to its eventual collapse.
The MMM is a brilliant scheme, a non-sentimental observer will tell you. It is a collector and distributor of funds, just like what the banks are doing…
MMM allows Nigerians to sign up and pledge a monetary donation to people who are in need of it. The pledge is made with a guarantee of 30% appreciation fee that is essentially an interest on the specific amount donated.
“Dear Mavrodians, the one month freezing of confirmed Mavros is a step to ensure the sustainability and stability of the MMM Nigeria system.
“There is no better time to PH (provide help) than now when you can earn 50% more of your amount of PH (provided help). There is nothing to worry about,” MMM said.
Main Reason for Suspension of Payment
The MMM is a brilliant scheme, a non-sentimental observer will tell you. It is a collector and distributor of funds, just like what the banks are doing – a bank, like MMM, will crash when we all(customers) panic and withdraw our money at the same time. While the scheme makes it look like your ‘investment’ is growing, and ‘dashes’ out money faster than the world’s biggest money minting complex can print money – the truth is, participants’ money is only being recycled – robbing peter to pay paul, and as long as participants(debtors) don’t all ask for money at the same time – the scheme will stay, maybe even for a thousand years.
Truth is, MMM is only susceptible to one thing- panic withdrawals, and until that happens like in Zimbabwe, not even the Federal regulators can shut down the scheme – since MMM is everyone and it is no one.
In Decembers, Nigerians(like other cultures in the world) have habits of over-spending and becoming very broke in January – and the only way to prevent mass withdrawals is to freeze all payments tillmid-January when it will no longer be needed. With recent ‘negative’ publicities, the panic to withdraw funds will even become more and the system will evenly come crashing down through unfulfilled request – since no one knows the liquidity ratio of the scheme; it is unregulated and not a bank, and produces no real goods or commodity which can be used in exchange for withdrawal requests.
Truth is, MMM is only susceptible to one thing- panic withdrawals, and until that happens like in Zimbabwe, not even the Federal regulators can shut down the scheme – since MMM is everyone and it is no one.