The suspended Ponzi scheme, MMM, promoted financial inclusion while it lasted, a Political Economist investigation has shown.

Checks across the commercial banks showed that many people were compelled to open bank accounts just to join the scheme.  The MMM scheme is online-based and you need to have a bank account to be a participant in the scheme.

Investigations showed that while the scheme lasted, many unbanked Nigerians hurried to banks to open accounts. This reflected in the upsurge of persons registering for their Bank Verification Number (BVN). Traffic to banks for account opening and BVN has since the suspension of payments by the scheme slowed.

But the scheme that promoted the agenda of the Central Bank of Nigeria to deepen banking inclusion operated illegally. With the huge sums of money at its disposal, the sheme ought to have been registered in accordance with the laws of the Security and Exchange Commission (SEC). According to the privacy laws of SEC, once a scheme like this gets a certain level of investment it must be registered. MMM throughout the time of its operation  was not registered hence operated illegally and may be sanctioned by SEC.

The MMM financial scheme caught on like wildfire in Nigeria but it has frozen its transactions, leaving many investors unsure what will happen to their savings. The BBC in a report explains how the Ponzi scheme found its way to the most populous nation in Africa and how it managed to survive.

Well, that depends on who you speak to. According to MMM itself, it is a “social financial network of people providing help and getting help from each other”.

Members are supposed to receive 30% back on their investment in just 30 days. It launched in Nigeria in November 2015 and according to its founders, has three million members.

But it has a murky history. It started in Russia in the 1990s and collapsed a few years later losing an estimated $100m (£80.3m) belonging to its members.

The Russian government outlawed the scheme and founder Sergey Mavrodi was jailed for four years.

It made its way to China where it was also banned. But in the past two years, the scheme has appeared in South Africa, Zimbabwe, Kenya, Uganda and Nigeria.

Nigeria’s financial regulator, the Securities and Exchange Commission (SEC), say it is a Ponzi scheme.

That means money paid in by new members is used to pay back previous members. It doesn’t generate any profit but relies on new members to keep going, which means that sooner or later it will collapse.

“No profit is being created,” says economist Tunji Andrews. “And the people that are going to pay for all your profit right now are the people that are going to get stuck when MMM finally crashes.”

Members either sign up online or with the help of a “guider” – a member who gets commission to recruit more investors.

Over the past few months, MMM Nigeria has undertaken an aggressive advertising campaign and used community forums and church meetings to recruit members.

On 13 December, the scheme was frozen. Members who expected a pay-out since Tuesday have been disappointed.

MMM claims it froze the scheme to deal with heavy traffic that it experienced in the run-up to the Christmas holidays.

It says it will re-open in January and though many people are sceptical, others have staunchly defended the scheme.