In 2016, an online Ponzi Scheme, MMM collapsed in South Africa and Nigeria. According (2017) to Fin24 it's users shared stories of loss and regret, with victims losing anything from R 500 to combined toll of R 1.3 m from a single family.
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.
With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.
Ponzi schemes are named after Charles Ponzi, who duped investors in the 1920s with a postage stamp speculation scheme.
Ponzi Scheme like MMM are keep on emerging and attracting thousands of people. It is important for people to learn to detect scams and care for their money.
Fanie Ndlovu is a founder of Varsitygenie, an organization that helps disadvantaged learners to apply for admission to tertiary and students grants. Fanie holds a diploma in IT and currently pursuing BTech: IT. Also, Fanie is a GDG Organizer community sponsored by Google, he started GDG with an aim of upskilling and giving developers resources that will enable them to develop technologies that solve problems of Africa. Lastly he is the Director of Startup Grind Durban University of Technology which is aim and educating and inspire students to start business.
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