Above Only Microfinance Bank Ltd, located at the Heritage Campus of Benson Idahosa University (BIU), Benin City, has been in the business of assisting students who need it with loans to settle their school fees and repay later. Miss Fejiro Ighodaro, a marketer at Above Only Microfinance Bank, explains how all of this works.
We would like to know about Above Only Microfinance Bank and the loans it gives to students of Benson Idahosa University.
Above Only is a microfinance bank created by Bishop Feb Idahosa to serve the Benson Idahosa University (BIU). Above Only is an organization under the church, just the way BIU is an organization that is under the church. So, we do not just service the school, we also service the church and other organizations that were established by the church.
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.
How does the loan run?
The loan 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. 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.
How much is Above Only able to lend? For instance, where the tuition of a Law student is way higher than that for some other courses, is Above Only able to take care of that entirely?
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.
What is the duration of the loan?
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.
What is the interest rate like?
The interest rate is 4 per cent monthly on reducing balance, that is 48 per cent per annum. This means as the principal element is reducing on a monthly basis, the interest element is also reducing.
Take the scenario of a part-time student who is self-sponsored or, maybe, his or her parents are deceased, how do you manage that situation?
Definitely, there are some people the student can reach out to in times of need, that person can stand in as a guarantor. It may be siblings, relatives, friends, family friends, or lecturers.
Is the loan directly linked to the school?
No, 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.
But you mentioned something about a lecturer being able to stand 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.
