Favour, a 300-level Mass Communication student at Benson Idahosa University (BIU) in Benin City, did not know what to do. She had not yet paid her tuition fee. Her parents, who were funding her education, had run into hard times.

As she scratched her head in search of a way out, her friend and classmate told her she could get a loan from Above Only Microfinance Bank.

“They helped me pay my tuition fee last year and I paid back later,” the friend said.

Favour felt relieved. She had always seen Above Only Microfinance Bank at the Heritage Campus of Benson Idahosa University (BIU) but never knew they could be of assistance to students in such critical times as she was in.

Apart from Favour and her friend, Above Only Microfinance Bank has been in the business of assisting students who need it with loans to settle their school fees and repay later.

A marketer at the microfinance bank, Fejiro Ighodaro, explained that Above Only is a microfinance bank created by Bishop Feb Idahosa to service the Benson Idahosa University (BIU). But it does not service just the university, it also services the church and other organizations that were established by the church.

“Above Only is an organization under the church, just the way BIU is an organization that is under the church,” Ighodaro told our reporter.

“Above Only has different products. An example is the student loan that you talked about. The student loan is a package that was created to help students to meet basic or certain needs that at the moment they are finding difficult to meet. So, the loan is for students that have gone through the screening process and have been certified as students with their ID card,” she said.

On how the loan runs, Ighodaro said it is given to students, but because they have to get to a certain age to open an account, the account is run by the parents. In other words, the account is opened by the student but is operated by the parents.

“When the student applies for this loan, he or she applies through the account, but there are criteria the student has to meet. For example, the student needs to have an ID card and an admission letter,” she said.

“Now if the student has applied for this loan, one of the parents has to be a guarantor for the loan. This is so we could affirm that the parent is in support of the loan. Normally, the loan is given to meet certain needs parents cannot meet at that particular time.

“For the student to apply for the loan, it means the parents have given the approval or go-ahead, so a parent has to accompany the student so the bank is sure that the student is not just coming to get the money for their own needs. The parent accompanying the student to apply for the loan is going to take the position of the guarantor because the bank would hold the parent liable, not the student.

“Another security to the loan is that the student has to give us two other guarantors. We do not accept land or landed properties as security, so we take personal guarantors so that in case there is any default, the guarantor will bear charges. So, basically that is how it runs. The student will have to open an account and the parents will have to give the loan consent,” she further said.

Ighodaro said the loan is basically for school fees payment and it can cover for any amount the student is applying for once there is a guarantee that the money will be returned, even if it is N2 million, N5 million or thereabouts.

“The duration of the loan is 12 months or one academic session. That is the maximum duration, and the probability of the student getting another loan depends on the student or his or her parents’ ability to pay the first loan given,” she said.

The loan comes with an interest rate is 4 per cent monthly on reducing balance, that is 48 per cent per annum, Ighodaro explained. This means as the principal element is reducing on a monthly basis, the interest element is also reducing.

If the student is a part-timer, self-sponsored, or maybe his or her parents are deceased, the student can reach out to some other persons who can stand in as a guarantor. It may be siblings, relatives, friends, family friends, or lecturers, she said.

Asked whether the loan is directly linked to the university, Ighodaro answered in the negative.

“The loan is on the phone and the school is not liable for any case of default. The school is not involved in the business activities of Above Only. The organisation only requires a means of identification to be sure that you are a student of the school,” she said.

Even if a lecturer stands as a guarantor for a student in the loan process, that does not mean that the school is aware or is liable for it.

“If the lecturer is signing for you, it is based on a one-on-one relationship between you as a student and the lecturer as somebody you are familiar with and not as a representative of the school,” Ighodaro said.