Just two years after Mavrodi Mundial Moneybox (MMM) Ponzi scheme crashed, Nigerians have embraced another Ponzi scheme called Loom Money Nigeria.
Despite the billions of Naira lost to MMM, Nigerians appear unbothered as they invest heavily in Loom Money.
It is a peer-to-peer scheme which allows people to invest as little as N1000 and cash out eight times the amount invested all within a short period.
For example, if you invest N1000 which is the minimum investment, you get N8000 after a short period.
The scheme involves a pyramid which is grouped into four colour-coded levels – purple, blue, orange and red. The first person to sign up for the group sits in the red level or central level, and gets the payout when the group fills up.
The orange level has two people while four investors fill the blue level. The purple has eight spots open to new entrants.
The group solita into too and bottom half once the eight spots in the purple level are filled. The investors in the outer levels move into new levels.
As the former eight investors move up the pyramid, the new groups of seven investors each recruit eight new investors thereby splitting the group into two halfs again.
Loom Nigeria only works if there’s a steady stream of new investors. This makes partakers to join WhatsApp groups where they urge people to join the Ponzi scheme.
The more and quicker people join the group, the quicker it is for investors to cash out.
