MMM pyramid scheme takes Zimbabwe by storm

Yes, it is possible to earn 100% per month here, but this is not a HYIP (high yield investment programme), boasts pyramid scheme Triple M on its website.

It claims the platform is a community of ordinary people, selflessly helping each other - a kind of global fund of mutual aid.

"This is the first sprout of something new in the modern soulless and ruthless world of greed and hard cash. The goal here is not the money. The goal is to destroy the world's unjust financial system. Financial Apocalypse!"

Triple M, also known as MMM, is an informal internet Ponzi scheme which has taken Zimbabwe by storm. The scheme allows depositors to earn 30% interest on whatever investment they make every month.

The scheme operates like the pyramid money schemes which sprouted Zimbabwe several years ago benefitting a lot of people just as it saw many others losing a lot of money.

One joins the scheme through the internet and when they log in their details, they indicate how much money they are willing to provide to the platform.

The platform requires banking details and one can use his or her mobile phone to participate in the scheme.

For instance, when one saves $100 to the system, it allocates that same amount to someone directly in the network who requires $100.

When the depositor wants to take out cash, they notify the system via email and it selects someone who has the same amount of money.

The system then allocates the money to the one withdrawing the cash.

*Mary, a lady who joined the scheme in April this year, said she had been able to get back her money on time with interest.

She said the money was paid directly to anyone who would have requested for it within Zimbabwe, with EcoCash being the payment platform.

"I put my money every week and I earn 30% interest; this has been sustaining me," she said.

"I have managed to earn money for daily expenses such as diapers and groceries.

"I started off with $50 and I received $85, with $20 joining bonus. But I don't leave money in the system for too long. The moment it matures, I take it out."

Mary said the scheme was good as it allowed one to get 10% whenever they recruited another person.

A couple from South Africa said they had managed to buy a residential stand with proceeds from the system and they would continue investing on the platform.

Mary said there were rumours this year that the scheme was no longer working after the Reserve Bank of Zimbabwe (RBZ) announced it was planning to introduce bond notes, but the information was untrue.

She said at the moment, the system has had many people requesting for money when there were few investors willing to "donate" funds into the scheme.

"The scheme has now announced that all those who are requesting money will get it by September 15 2016 as it was overwhelmed with requests," she said.

"So other people are now angry that they are failing to withdraw their money but when you join the system on the internet, you will see a notice that says joining is at your own risk."

RBZ governor John Mangudya told Standardbusiness the central bank was investigating the scheme as it was not registered with the monetary authorities.

"We have already received information and our financial intelligence unit is in the process of investigating the matter. That scheme is not registered as a financial institution," Mangudya said.

The MMM scheme has a downside in that one is required to write a testimonial when they receive the money through the scheme on the network.

The participants are required to make a video of themselves testifying on how the money has helped them - a move designed to entice others to joining.

Economist John Robertson said Ponzi schemes were not sustainable and the pyramid scheme base could get wider and wider.

He said at some point, the scheme would stop growing and that would see some people losing out.

"The main problem is that people are doing it because they get money for nothing," Robertson said.

"The people who join these schemes are greedy and are not concerned about those who lose. It is attractive but there will be losers in the end."

Robertson said people should use the banking channels to invest as they would get good returns that way.

However, interest rates on deposits in Zimbabwe on average are at 3% per annum, which is far less than what the Ponzi scheme is offering.

Most women are running their own Ponzi schemes where they pool funds every month that they lend to members at 10% interest per month.

The MMM scheme is also informal and there is no proper paperwork in place and thus works on a referral basis.

Since the country introduced the multicurrencies in 2009, the banking sector has been offering low interest rates on deposits. This has resulted in many depositors shunning the banking sector.

MMM is a Russian company that operated one of the world's largest Ponzi schemes of all time in the 1990s.

By different estimates, between five to 40 million people lost up to $10 billion.

In 2013, two Bulawayo-based Ponzi schemes - Geozing Pawn Brokers and Perfect Shot Investments - collapsed after they were found in contravention of the Banking Act by taking deposits illegally.

The central bank has been weeding out illegal operators to protect the public from being fleeced of their hard earned cash by unscrupulous companies.

Former central bank chief Gideon Gono led a crusade to weed out the sector of unscrupulous asset managers he described as "briefcase businesses and [an] accident-in-waiting", leading to the closure of over a dozen firms.

* Not her real name