Public endorsement of Ponzi schemes by Nigerian celebrities, greed and poor financial investment knowledge have been identified as some of the major enablers to the loss of billions of naira by investors in ponzi schemes, ICIR findings have shown.
Nigerians lost over N300 billion in ponzi schemes in five years, according to a research done by Norrenberger Financial Investments Scheme, an investment banking financial firm.
ICIR checks revealed the N300bn sum was about the combined revenue generated by Rivers, Abuja, Delta and Kaduna states in 2020.
“Most Nigerians get into the ponzi scheme knowing it is a bubble, hoping they get in early enough to make some profit. Most players know it is a gamble, so they put in only small amounts they can afford to lose,” the Managing Director of Norrenberger Financial Investments, Tony Edeh, told the ICIR.
The financial expert, who spoke further on how low financial knowledge is a key enabler to the ponzi scheme in Nigeria, stressed that many victims of the ponzi scheme did not have the knowledge to pick out flaws from an offer.
He added, “Financial literacy is still low in the country. As a result, few can tell when an offer is too good to be true. Many investment scams mask themselves as legitimate by flaunting business registration certificates.”
The investment banker emphasised there were other red flags to watch beyond registering a business with the Corporate Affairs Commission (CAC).
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