The Central Bank of Nigeria (CBN) has warned Nigerians to be careful of
any deposit money institution that is not insured by the Nigeria Deposit
Insurance Corporation (NDIC) especially the trending MMM Nigeria
community.
The bank through its the acting Director of Corporate
Communications, Mr. Isaac Okoroafor, made this known yesterday against
the proliferation of wonder banks in the country in recent times.
Okoroafor said such deposit money institutions were dubious present Ponzi schemes.
“At
times like this when the economy has suffered some decline, Nigerians
should be very careful with those they deal with. Any institution that
is not licensed by the CBN to accept deposits should not be given money
to keep under any guise,” he advised.
He warned Nigerians to beware of the so-called wonder banks, explaining that they were makeshift institutions to dupe people.
“We
can vouch for the banking system. The deposit money banks are the only
licensed institutions to take deposits. If you need to deposit money in
any form, go to any of the deposit money banks and put your money, you
can buy fixed income instruments or invest in stocks,” he said.
Okoroafor
said the CBN could not guarantee the unregistered institutions,
insisting that when depositors lose money to them, the bank would not be
able to help them.
“These people always come with very
interesting propositions. These are fraudsters who are just out there to
collect people’s money and run away as soon as they hit their target.
There is no insurance because the NDIC does not even protect them
against such risks when they occur,” the CBN said.
He said the
CBN was intensifying efforts and liaising with the various security
agencies to identify the promoters of these schemes and have such
persons arrested and prosecuted, adding that anyone caught with them
would also be made to face the law.
Promoters of wonder banks and
other pyramid schemes in the country are currently taking advantage of
the rising level of unemployment as well as the shrinking disposable
income to attract unsuspecting prey.
From Lagos to Port Harcourt
and some other big cities in the country, owners of these illegal
businesses have been offering Nigerians mouth-watering interest rates,
which cannot be found in the banking system, in a bid to attract large
number of customers before they run away with huge cash.
For
instance, at the Ojuelegba area of Lagos, THISDAY was recently given a
small handbill advertising investment schemes that offers 30 per cent
returns in 30 days.
Also, there is a new Ponzi scheme called
‘MMM’ that is spreading like wildfire. A lot of young school leavers
have already signed on to this scheme, which the promoters are marketing
as a “mutual fund.”
“MMM offers its participants 30 per cent
growth rate per month for each and every donation they make into the
system… MMM belongs to the community, its sustainability depends on the
activities of the people that make up the MMM Nigeria community, that is
me and you and other MMM Nigeria participants,” the promoters wrote in
an online advertisement.
Typically, what promoters of such
pyramid scheme do is that they offer rates far beyond what is obtainable
in commercial banks. This would always attract a lot of people who
would always rush in to stake their funds. But, those who join the
scheme late would always be the ones to lose their shirts as they would
have been convinced by those that joined earlier to invest huge amounts
of money.
But experts have warned against falling for the bait of
illegal deposit-taking institutions which are not licensed by the CBN,
saying that their only intention is to defraud members of the public.
Recall
that with the Nigerian economy is in recession, the National Bureau of
Statistics (NBS) recently revealed that the country’s gross domestic
product (GDP) contracted by 2.06 per cent in the second quarter of 2016,
compared to the negative growth of 0.36 per cent recorded in the first
quarter of 2016.
Also, national unemployment rate also rose to
13.3 per cent in the second quarter of 2016, from 12.1 in the first
quarter of 2016.
Source- financialwatchngr.