Ponzi schemes are no longer new in the arena of investment fraud, nonetheless they continue to find mutter and balance in Nigeria. A Ponzi plot is a wrong investment setup where returns are paid to older investors using the money from new investors, instead of from any right business train.
It changed into named after Charles Ponzi, an Italian businessman who scammed thousands of oldsters in the 1920s by promising mountainous profits from international mail coupons — profits that by no methodology existed.
Over time, Ponzi schemes gain taken diverse sorts across the arena, including in Nigeria. From MMM to Umana-Umana, to more moderen right estate and online platforms, these schemes gain grown despite countless warnings. Nevertheless why attain they abet succeeding in Nigeria?
Listed below are 5 main reasons:
1. Lack of Upright Investigation by Investors
Many Nigerians tumble sufferer to Ponzi schemes because they fail to examine the background of the investment. Outdated to putting money into any opportunity, it’s important to question questions esteem:
- Who is running the corporate?
- Is it registered with the Central Bank of Nigeria (CBN) or Securities and Commerce Commission (SEC)?
- What does the business indubitably attain?
- Are the promised profits practical?
Sadly, most folk skip these steps. They invest blindly and forestall up losing their money.
2. Greed and the ‘Get-Rich-Fast’ Mindset
There’s a sturdy desire amongst many Nigerians to originate quick money. Promises esteem “20% returns every month” or “double your money in 14 days” sound too blooming to be factual — and they on the total are.
Composed, greed makes folks ignore standard sense and whisk after excessive returns with out understanding the hazards. This “regain filthy rich or die trying” perspective keeps Ponzi schemes alive.
3. Blind Faith and Non secular Influence
In Nigeria, emotions and faith typically gain an impact on investment selections. Folk fundamentally bid things esteem “It gained’t happen to me,” or “God will defend my money.” Some even judge that being a member of a church or mosque-walk neighborhood makes the investment right.
Sadly, faith is no longer a financial belief. Many gain neglected the warnings and misplaced money simply because somebody they believe, corresponding to a non secular chief or buddy, advised the plot.
4. Lack of Financial Knowledge
Many Nigerians attain no longer understand how investments work. They’ll’t study financial statements or test the health of an organization. Some don’t even know the adaptation between valid kind and illegal investments.
Even supposing financial advisors exist and might abet for a small rate, most folk don’t look professional abet. This lack of information makes it uncomplicated for scammers to deceive them with wrong guarantees.
5. Movie well-known person Endorsements and Social Media Hype
Social media has made it uncomplicated for Ponzi promoters to attain folks snappy. When in vogue celebrities, influencers, or even pastors endorse a product or investment, many followers join with out asking questions.
Ravishing because something is trending or advertised online doesn’t imply it’s right. Many individuals gain joined Ponzi schemes simply because they seen them promoted on WhatsApp, Instagram, or Facebook.
