How to find legitimate investment platforms in Nigeria
The recent possible crash of the Ponzi website, 86fb has left many Nigerians asking how do they identify and find legitimate investment platforms.
The internet is a wild and wide place that can leave you feeling a little bit intimidated.
To be sure, millions of people around the world make legitimate money from the internet, almost in a similar manner that others have lost life savings to Ponzi schemes and scammers on the internet.
With just a few clicks, you can find yourself on a website that is promising to fix all your financial problems if you can just believe and take the first step.
What is a Ponzi scheme?
A Ponzi Scheme is any investment platform promising high rates of return with little to no risk to investors. It makes promises that are way too good to be true, but then generates returns for early investors by acquiring new investors and is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers.
Any investment platform that is asking you to convince others to come invest for you to get a reward, most especially if such a company does not have a usable product or service, is most likely a Ponzi scheme.
Ponzi schemes have become veryc onvincing as it is becoming more difficult for them to get their victims with the internet. So they setup websites and marketing campaigns just like most legitimate businesses. Some even go as far as to obtain certifications using dubious means from the government.
Here are ways to ways to verify if an investment platform is legit or not in Nigeria.
1. Verify if the platform is registered and regulated
The very first step in your due diligence in confirming the authenticity of an investment platform is to confirm whether or not it is regulated.
The government agency in charge of regulating investments in Nigeria is the Securities and Exchange Commission SEC. They regularly warn the public about unregulated investments and Ponzi schemes on their website.
You can find legitimate investment platforms in Nigeria via this SEC portal.
2. Is there a usable product or service on offer?
Making money 101 requires that some sort of products or services be exchanged before money can be made. If an investment platform has no clear product or service you are investing in, that is a huge indicator of a Ponzi scheme.
Between 2014 and 2015, millions of Nigerians invested in MMM despite having no product or service. The scheme was about getting 30% of your investment in 2 weeks without selling anything or offering any services. Of course MMM eventually crashed with over 12 billion naira in it.
3. Guaranteed returns on investment?
Legitimate investment platforms inform you of possible losses and provide advice on how to mitigate risks. But when an investment platform is giving you guarantee of 15%, 30% monthly? That is a huge redflag and you should probably run because nothing in our world is guaranteed.
4. Is Participation Strictly Driven by Referrals?
A legit investment platform shouldn’t be entirely driven by referrals. Of course you’re getting a reward for each new customer you bring in, and if the platform only makes money from new customers, it is not a sustainable investment for the long term.
5. Is the returns on investment way too good?
The only reason an investment platform sounds way too good to be true is because it is way too good to be true. A platform that is offering 30% or even 50% monthly is too good to be true and not sustainable for the long run.
There are a lot of Ponzi schemes in Nigeria, same way there are legitimate investment platforms. You can start your due diligence by looking on the SEC website.