The Mavrodi Mundial Moneybox popularly known as MMM may have come and gone but the lessons learnt from the scheme remains indelible. For some of its subscriber, it’s scar is not only unforgettable, it may never heal while for others their financial position may changed positively as a result of their participation in the scheme.
Nigerians that subscribed to the Ponzi scheme did so despite Central Bank (CBN) and Security and Exchange Commission (SEC) warnings against such investment . For some the scheme provided an investment opportunity leveler between the rich and the poor, no matter the amount you invested, you are sure to get between 130% to 150% returns within 30 days and without doing anything other than investing your funds. Thus a poor man who invested N20,000 was sure to get between N26,000 and N30,000 in 30 days so also will a N1million investment fetch between N1.3million and N1.5million in 30 days
A lot of people borrowed money to invest in MMM while others invested their life savings, some used their school fees and house rent while some other simply invested fund kept with them in trust for the short term but enormous and proven returns the scheme offers. This was despite disclaimer on the site that “the scheme is neither a business, nor an investment platform and thus do not support participants using borrowed money”.
In the less that two year life of the Ponzi scheme and by late 2016 when the Ponzi scheme went on year end break and never returned, estimates from the Nigerian Electronics Fraud Forum (NeFF) revealed that about 2 million Nigerians signed up for the scheme and about N29billion was invested by Nigerians between June and December 2016 alone while a total of N11.9billion was eventually lost to the scheme by Nigerians.
The National Financial Inclusion Strategy was launched by CBN on October 23, 2012, with an overall target of reducing the percentage of adult Nigerians excluded from access to financial services from 46.3 per cent in 2010 to 20 per cent in 2020. Meanwhile a survey conducted by Enhancing Financing Innovation and Access in 2016 revealed that Nigeria was battling with 41.6 per cent exclusion rate.
To deepen financial inclusion and achieve the Apex bank target of 80 percent financial inclusion rate of adult Nigerians by year 2020, these are some of the lessons Financial institutions can learn from the success of MMM.
- Language simplicity in Deepening Financial Inclusion
The language was simple, invest an amount and get 130% in 30 days, no ambiguity, no financial jargons, no marketing skills deployed, no well dressed guys or ladies in skimpy dresses trying to convince prospects.
Financial institutions must propose value to have deeper penetration of the unbanked. Banks must learn and understand the language of the unbanked and speak to them in their dialect.The benefits and value proposed is what sells, not huge targets handed over to employees. If the customer is aware of what it is to be gained in a banking relationship them only little conviction will be needed.
Banks must also research and role out suiting products for loan as well as liabilities. The era of one product fits all is gone. Market segmentation and delineation is needed for deeper financial penetration. Customers in different segments must align with suiting bank products and make it theirs.
2. Easy registration
Registration on MMM website took just about 2 minutes or less, just one page form to be filled. Sex, marital status, state and local government of origin, mother maiden name was not needed. Jus show interest and provide your fund was what was needed.
Financial institutions aiming at penetrating the unbanked must make account registration process simple, banks must dish the several page forms to be filled, regulators must also help simplify the process of opening accounts. The BVN has given banks a wonderful opportunity to simplify the process. CBN should allow banks make the best use of the BVN. With the BVN, regulatory conditions such as identifications, address verification and passport photograph may not be required in the account opening process.
3. Word of mount or referral advert can assist in Deepening Financial Inclusion
There was no record of MMM advert cost, a subscriber just need to talk to a prospect to invest in the scheme so he can cash out. Referrals was what worked for the scheme, once a subscriber is satisfied he just begin to tell everyone around him about the scheme. Several social media messages invitations were send without the involvement of the promoters of the scheme.
Banks must ensure satisfaction of all their customers most of whom may be willing to tell others about their products. As the saying goes “A satisfied customer will tell 100 prospects just as a dissatisfied customer will”
Network marketing may also be adopted by banks to deeply penetrate the unbanked especially in rural areas. A bank customer that knows that there are benefits for him if he enroll his friends, relatives and neighbors who are not banked will go all out to ensure they are enrolled.
4. Support structure
MMM support structure was fantastic, users without the involvement of the promoters created WhatsApp and other social media groups to support other members. They are always available to support one another and help resolve issues among themselves, this is largely because they needed one another to cash out.
Banks must ensure excellent supports for their customers in Deepening Financial Inclusion. Bank call centers and help lines must be toll free and provide prompt and complete resolution of customer’s issues. The era of customer waiting on phone lines for several minutes at the customer’s expense in other to resolve issues on their accounts should be dished.