NELFUND Introduces Token System for Student Loan Payments

The Nigerian Education Loan Fund (NELFUND) is testing a new token-based payment mechanism aimed at preventing students from paying their tuition twice and reducing the need for refunds.

Under the pilot scheme, which has already drawn nearly 400,000 applications, students will be able to authorise the transfer of their approved loan funds directly to their institutions’ accounts via a mobile application.

Managing Director Akintunde Sawyerr explained during a Wednesday press briefing that the system addresses a flaw where students, unaware that NELFUND had already settled their fees, made duplicate payments to meet school deadlines.

This miscommunication previously led to administrative headaches and refund requests.

“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Sawyerr said.

Instead of disbursing cash to students, the fund will issue tokens linked specifically to the institution they attend.

Upon notification that funds are ready, students can initiate the transaction. The funds cannot be diverted to personal bank accounts or transferred to a different school.

“We’re not giving the students money, but we’re giving them power,” Sawyerr noted.

Executive Director Mustapha Iyal clarified that the tokens function independently of personal or mobile money wallets.

“It’s not a personal wallet; it’s not a mobile money wallet at all,” he said, reiterating that the system is designed to strictly channel payments to the designated institution.

The tokenised system specifically applies to institutional charges, while upkeep allowances will continue to be paid directly into students’ bank accounts.

The officials did not specify a timeline for the full rollout of the system.