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After MMM Zimbabwe, Zimbabweans Start Whatsapp Groups Pyramid Scheme Craze

FinTech

After MMM Zimbabwe, Zimbabweans Start Whatsapp Groups Pyramid Scheme Craze

Just last week we published a story about RBZ warning the public against Ponzi and Pyramid schemes. The Reserve Bank of Zimbabwe (RBZ) said anyone who decides to invest in the local division of the MMM Global scheme are doing it at their own risk as MMM Global Zimbabwe is neither a “registered or regulated” unit.

And as of last month MMM Zimbabwe announced that all those who are applying for money will get it by September 15 2016 as it was overwhelmed with request.

One of the main problems with schemes like MMM is its need constant joining of new members to join the system in order to offer existing members with financial assistance. And this is its number one problem. MMM relied on new capital entering the system to pay its members, rather than actual profits earned from selling goods and services.mmm whatsapp

Since MMM freeze Zimbabweans have taken it upon them selves to start their own schemes via Whatsapp groups. The Groups are run by a single admin who is there to balance the inflow and outflow of money, and its growth rate can be adjusted to keep this balance in check, according to one Whatsapp admin.

The members Pay the Admin $3 in weekly admin costs, this roughly translates to $3*100=$300 if the has at least 100 members.That is a good payday for the admins.

The biggest problem with these Schemes is that if anyone decides to stop ‘providing help’, given that admin is balancing the flow, people will stop ‘getting help’.

“There are no promises or guarantees… Our Whatsapp MMM system is just a platform and guarantees nothing,” according the admin.

When we spoke to a one of the member, she said she normally gets her 30% return within a day and most of the transactions are done via Ecocash.

She add that if you want to join these group and make contributions , you must first “study” how the groups operates and don’t stay in a group for a long time as the follow of cash may be come inconstant .

The Pyramid Scheme Craze preys on the poor, who are understandably frustrated with a financial and economy of the country that seems to benefit only a few to the exclusion of the many. This makes them vulnerable to ‘get rich quick’ schemes, which, if history is to trust, leave people worse off than they were before.

Pardon has been a technology enthusiast his entire life and has spent the better part of last decades in information technology and security, and he writes with an aim to remove some of the "mysticism" from the cyber world. He’s the Editor at Techunzipped. Away from the keyboard, you're likely to find him playing with the latest gadgets or the latest Game.

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