Why Ponzi Schemes Keep Succeeding in Nigeria

Ponzi schemes are not new in the world of investment fraud, but they continue to find growth and stability in Nigeria. A Ponzi scheme is a fake investment setup where returns are paid to older investors using the money from new investors, rather than from any real business activity. 

It was named after Charles Ponzi, an Italian businessman who scammed thousands of people in the 1920s by promising huge profits from international mail coupons — profits that never existed.

Over time, Ponzi schemes have taken different forms around the world, including in Nigeria. From MMM to Umana-Umana, to newer real estate and online platforms, these schemes have grown despite countless warnings. But why do they keep succeeding in Nigeria?

Here are five major reasons:

1. Lack of Proper Investigation by Investors

Many Nigerians fall victim to Ponzi schemes because they fail to check the background of the investment. Before putting money into any opportunity, it is important to ask questions like:

• Who is running the company?
  
• Is it registered with the Central Bank of Nigeria (CBN) or Securities and Exchange Commission (SEC)?
  
• What does the business actually do?
  
• Are the promised profits realistic?
  

Unfortunately, most people skip these steps. They invest blindly and end up losing their money.

2. Greed and the ‘Get-Rich-Quick’ Mindset

There’s a strong desire among many Nigerians to make fast money. Promises like “20% returns every month” or “double your money in 14 days” sound too good to be true — and they usually are.

Still, greed makes people ignore common sense and chase after high returns without understanding the risks. This “get rich or die trying” attitude keeps Ponzi schemes alive.

3. Blind Faith and Religious Influence

In Nigeria, emotions and religion sometimes affect investment choices. People often say things like “It won’t happen to me,” or “God will protect my money.” Some even believe that being a member of a church or mosque-run group makes the investment safe.

Sadly, faith is not a financial plan. Many have ignored the warnings and lost money simply because someone they trust, such as a religious leader or friend, recommended the scheme.

4. Lack of Financial Knowledge

Many Nigerians do not understand how investments work. They can’t read financial statements or check the health of a company. Some don’t even know the difference between legal and illegal investments.

Even though financial advisors exist and can help for a small fee, most people don’t seek expert help. This ignorance makes it easy for scammers to deceive them with false promises.

5. Celebrity Endorsements and Social Media Hype

Social media has made it easy for Ponzi promoters to reach people quickly. When popular celebrities, influencers, or even pastors endorse a product or investment, many followers join without asking questions.

Just because something is trending or advertised online doesn’t mean it is safe. Many people have joined Ponzi schemes simply because they saw them promoted on WhatsApp, Instagram, or Facebook.