By promising unrealistic returns and relying on ever growing recruitment, these schemes collapse once new contributions dry up, leaving investors with crippling losses.
Ponzi schemes continue to wreak havoc on Nigeria’s financial landscape, with CBEX being the latest to collapse after defrauding investors of billions. These operations follow a predictable pattern: offering unrealistic returns (20-50% monthly), aggressive recruitment tactics, and fabricated transaction records. Experts warn that such schemes ultimately crumble when new investor inflows stop, leaving victims with irreversible losses.
“Payouts to existing members come from new recruits’ funds – it’s a mathematical impossibility to sustain,” explains a financial analyst. The schemes exploit regulatory gaps, often registering as cooperatives or tech startups to evade scrutiny.
Beyond individual losses, Ponzi schemes strain national infrastructure – overwhelming payment systems with suspicious transactions and forcing banks to implement restrictive measures. Their viral social media campaigns create false legitimacy, using doctored screenshots and peer pressure to accelerate membership. When collapse comes, it leaves both financial and psychological scars that deter legitimate investment.