After the death of its founder last month, Mavrodi Mundial Moneybox (MMM), the decades-old Russian Ponzi scheme operational across Africa will officially shut down.
A statement on its Nigerian website says continuing without Sergey Mavrodi, who passed away last month following a heart attack, “is impossible and makes no sense.” In truth, the “investment” scheme has been dead for a while.
At its peak, MMM had around three million users in Nigeria but, in December 2016, after a rumored slowdown following increased scrutiny from the government, it suspended operations and never resumed. Beyond Nigeria, MMM has popped up in other African countries, including Zimbabwe, Kenya and Ghana with some of its operations based on bitcoin rather than cash.
While fully operational, MMM described itself as a “mutual aid fund” and based its racket on its users “helping” and sending each other money, and promised 30% monthly interest rates. Analysts say MMM, like most Ponzi schemes, mainly thrived given the difficult economic times amid Nigeria’s first recession in decades with many wooed by its tantalizing interest rates. But even though pyramid schemes are not new in Nigeria, the scale of MMM’s growth has signaled other similar multi-level marketing schemes to the potential ubiquity of Ponzi schemes in Nigeria, particularly as internet penetration and social media usage spreads.
Since MMM’s slowdown in 2016, several other multi-level marketing schemes promising irrationally high returns and exploiting regulatory grey lines have emerged. One such scheme currently asks users to “invest” $1,200 in gold and promises more than 100% returns after a month on the condition that users get seven other people to pony up the same amount. But typically, after early adoption and quick payouts, the schemes struggle to stay afloat when people stop joining. A Lagos-based accountant who did not want to be named told Quartz he’s still waiting on his payout after investing $1,200 in a gold-based scheme last June.
Mavrodi’s death has been met with mixed reactions in Nigeria but, more than anything else, the government will likely be hoping that the lessons learned by Nigerians who lost around $50 million when MMM collapsed serves as a strong enough cautionary tale.
Sign up for the Quartz Africa Weekly Brief — the most important and interesting news from across the continent, in your inbox.