Determinants of investment decision in a Ponzi scheme : Investors’ perspective on the Modaraba scam

Purpose: This paper aims to identify the key patronage factors that encouraged the public for investment in the Modaraba scam – a Ponzi scheme perpetrated in Pakistan with a whim of Sharīʿah-compliant business and intermediation of religious clerics. Design/methodology/approach: In a qualitative research, semi-structured interviews were conducted with the investors of the scam followed by thematic analysis to conclude on the subject matter. Findings: The results reveal numerous stimuli, thematically categorized as the monetary stimulus, religiosity stimulus and lubricants, which mobilized investment towards the scam. In general, a lucrative rate of return on investment and personality of the agents, being religious clerics, were the two prominent reasons, which convinced unanimously all investors. In particular, the religiosity stimulus (agents’ personality and Sharīʿah-compliant business) was a novel and eye-catching slogan of the scheme. Originality/value: Keeping in view the amount of scam and number of victims, this research is a robust attempt to conclude on the determinants of investment decision in the Modaraba scam.