The Nigerian Education Loan Fund (NELFUND) has introduced a pilot tokenised payment system to streamline institutional payments and eliminate refund complications for students. According to Managing Director Akintunde Sawyerr, the new system will give students direct control over fee disbursement, preventing double payments to schools. With nearly 400,000 applications already received, NELFUND aims to address issues arising from its previous payment method.
Before the revision, NELFUND transferred tuition fees directly into the bank accounts of tertiary institutions, while living allowances were disbursed directly to the students. However, this method led to complications, including double payments and refund issues. Sawyerr explained that some students had already paid their fees before NELFUND started paying, resulting in double payments to schools. This caused difficulties for students, who were sometimes forced to pay again or withdraw from school activities.
The tokenisation framework focuses specifically on institutional fee payments, allowing students to use a mobile app to authorise payments from their approved loan funds directly to their institutions. Once a student receives the token via the mobile app, they can initiate the transfer at their discretion. The funds will be transferred to the specific school only, and the student cannot use the payment for any other purpose.
The new system eliminates situations where NELFUND disbursed fees to an institution, but the student, unaware of the transaction, paid the same fees independently. Sawyerr noted that this caused problems for students, who had to seek refunds from their institutions. By giving students control over payment, NELFUND aims to prevent such situations and ensure a smoother payment process.
Each token issued by NELFUND is encrypted and linked strictly to the designated institution, ensuring funds cannot be redirected into secondary accounts. This provides an added layer of security and ensures that funds are used for their intended purpose. The mobile app will enable students to manage their payments easily and efficiently.
The introduction of the tokenised payment system is part of NELFUND's efforts to improve its services and provide better support to students. With the new system, students will have more control over their payments, and institutions will receive timely and accurate payments. This is expected to enhance the overall efficiency of the payment process and reduce administrative burdens on students and institutions.
NELFUND's tokenised payment system has the potential to make a significant impact on the education sector in Nigeria. By preventing double payments and eliminating refund complications, the system will provide a more streamlined and efficient payment process for students and institutions. As the pilot phase progresses, NELFUND will continue to monitor and evaluate the system's effectiveness in addressing the challenges faced by students and institutions.
Key points
- The tokenised payment system gives students direct control over fee disbursement, preventing double payments to schools.
- The new system eliminates situations where students are forced to seek refunds from their institutions.
- Each token issued by NELFUND is encrypted and linked strictly to the designated institution, ensuring funds cannot be redirected into secondary accounts.
