By Enyeribe Ejiogu ([email protected])
Once again, Nigeria is awash with excitement about another organisation offering mouth-watering financial benefits to people, who invest their hard-earned money in the scheme that it has been touting in the country through its website.
MMM-Nigeria, an online investment scheme has been causing a buzz in the country, and many people have been caught up in the euphoric picture of sudden easy money coming into their hands after 30 or so days of transferring money to another member under the instruction of the unknown individuals coordinating the operations of MMM through the online platform of the organization.
Innovation is the juice that drives growth and advancement in all facets of human life and endeavours. The initiators of MMM are believed to have re-engineered the basic idea of the classic pyramid scheme first perpetrated by Charles Ponzi in 1920. They have essentially leveraged on the obscurity which a properly configured and hard-to-trace online platform confers.
Strictly speaking, MMM true to its claim is not a bank and does not require a banking licence to run its operations. As defined by Wikipedia, “a banking licence is a legal prerequisite for a financial institution that wants to carry on a banking business. Typically, a business is not permitted to call itself a bank unless it holds a banking license.”
By virtue of the Central Bank Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA), the CBN superintends over the Nigerian banking system and executes the authority of the Federal Government over the financial through the issuance of banking licence and such other licences that enable properly registered non-banking financial companies to render financial services to the public, under the regulatory oversight of the apex bank.
Wikipedia further explains that a “non-banking financial company is an institution that provides financial services without meeting the legal definition of a bank, such as holding a banking licence.”
To operate as a bank in Nigeria, a corporate entity must meet the following basic requirements specified by the CBN:
1. It must first make a formal application for a licence to carry on banking business in Nigeria. The application must be addressed to the Director of Banking Supervision Department, Central Bank of Nigeria, Garki, Abuja and submitted with the following documents:
i. Non-refundable application fee of N500,000.00.
ii Deposit of minimum capital of N25 billion with Central Bank of Nigeria on application with evidence of deposit by each shareholder. The source of capital contribution by each shareholder or subscriber would subsequently be verified by Bank Examiners.
iii. It must submit a feasibility report/business plan that should contain information on the following: (a) Minimum paid–up capital requirement of N25 billion for new banking licence; (b) Ownership structure in columnar format showing name of proposed investor(s), profession/business and percentage shareholding.
Detailed bio-data/resume of shareholders should be attached. The fitness and suitability of the promoters would be ascertained through security screening and status enquiry from Securities and Exchange Commission, Nigerian Deposit Insurance Corporation, National Insurance Commission and the Credit Bureau and reference to CBN’s black book maintained by the Bankers Committee.
2. Certificate of Incorporation and Board Resolution supporting company’s (ies) decision to invest in the equity shares of the proposed bank. Names and addresses (business/residential) of owners/directors and their related companies, if any; Latest three years audited accounts and reports of the company and Tax Clearance Certificate and other ancillary documentation specified by the CBN.
It suffices to note that the requirements are very detailed and extensive and the process is very rigorous and entails extreme levels of transparency a banking licence is granted by the CBN. Even after the licence has been granted, the CBN continuously monitors the operation of the new bank to ensure that all extant laws and regulation are faithfully and legally observed. In the same spirit and in accordance with the provisions of BOFIA, the CBN processes applications for the establishment of microfinance companies in Nigeria.
In the wake of the widespread participation of Nigerians as “members” of MMM-Nigeria red flags have been raised over the status of an organization which promotes itself on its website (www.nigeria-mmm.net) as a social financial network. To participate in the primary business of MMM, a person must first register online on the website.
On what it is about, MMM says of its self: “MMM is a people community, which help each other for free, and absolutely consciously, they transfer money directly to each other, from one bank account to another, without any conditions, guarantees and promises. Just only because they want to do that. Because it is a good deal to help each other. It means the Mutual benefit fund as it is.
“There is no formal organization, no legal person in MMM. And of course there is no central bank account, no other activity in any form. Neither close, nor open. There is nothing! There are only millions and millions of simple participants, simple private persons. And their bank accounts. And nothing more.
“And of course there is no special registrations, permission and licenses in here.
(Permissions and licenses for what and for what reason? For money transfer from one man to another? And whom this licenses and permissions should be given?
“Thus, MMM is absolutely legal and does not break any laws. Because there are only money transfers between private persons and nothing more. It is impossible to forbid MMM. The same way it is impossible to forbid people manage their own money the way they like. Thus they need to forbid the whole private property institution.
“So everything is absolutely clear with the lawfulness. There are no violations and they won’t be! Let’s now talk about the other. About honesty. It is important to underline, that MMM doesn’t cheat or abuse anyone. In other words it is not a cheat or fraud in any case! Everyone is informed about the possible and impossible risks fully and from the very beginning (And everyone put a mark during the registration, confirming that he was informed about the warning.)
“MMM itself is more honest (in 100 times!) than any other bank, or any financial institution with their licenses or permissions. Because they all lie to you, hold or keep back something and so on. And only MMM doesn’t keep you back in silence, doesn’t hide anything and tell everything honestly and openly. “Yes, You take a great risk!… Yes, no guarantees!… Yes, You may loose everything at any moment!…” – Did You hear the same before anywhere? Only in MMM.
Honesty, honesty and again honesty! This is the main principle. Honesty, openness and trust. This (sic) are the three whales on which the system stands. Have (you) ever seen (a) situation, when (where) absolutely unacquainted people transfer money to each other with no reason? Giving them like a gift actually? Millions and millions of people all over the world, every day? Delirium? Fiction? Utopia? No, it is MMM!
Participate! Welcome to the system! Long Live MMM!”
Mr. Joseph Ibezim, a writer in Okota, Lagos, raised posers about MMM, wondering why the site is very silent on information on the physical location of the organization anywhere in the world. Click on the “contact” button, which on most other websites would state the physical address of the organization, this is not so with MMM. Rather what you get is a blank online form that prompts you to provide your own personal contact information.
What is the probable reason, Sunday Sun reporter asked Ibezim? His response: “It means that the initiators of the enterprise are faceless. They do not want to be traceable. They are ghosts. Ghosts are not physical and you cannot arrest or sue a ghost. I have serious doubts about the genuineness of this organization. It is like a vacuum cleaner sucking in dust and dirt. My real fear is that before long the thousands of people being sucked in to become members will lament when the money they supposedly paid into the account of somebody to help the person does not come back they will also need help themselves. Then it will dawn on them that they have been conned. It would be too late then.”