An estimate of over 65,000 beneficiaries of the Higher Education Loans Board (HELB) are reportedly unbothered by the threat of being listed with the Credit Reference Bureaus (CRBs) over unpaid student loans estimated to be up to 6.5 billion Kenyan Shillings.
This is according to Business Daily.
In April 2019 the Higher Education Loans Board (HELB) gave beneficiaries of the State student loans who enrolled as far back as 1975, up until the middle of May 2019, to confirm their repayment status.
Failure to confirm said repayment statuses, would lead to the defaulters getting listed on credit bureaus.
Even after the threat of being listed on the Credit Reference Bureaus (CRBs), only 1,879 persons out of the estimated 67,000 who owe the student loans agency (the Higher Education Loans Board (HELB)) billions in unpaid debt, have begun to repay their old loans, to date.
The Higher Education Loans Board (HELB) confirmed this in a statement saying; “As at May 24, a total of 1,879 loanees started repaying their loans,”.
The Loans Board also added that “For those who have engaged with us and started repaying, the listing (CRB) will be positive. For those loanees who have not heeded to the notice, the listing will be negative.”
The Credit Reference Bureaus (CRBs) listing, is expected to jeopardise their chances of borrowing from banks and saccos.
The Higher Education Loans Board (HELB) in April 2019, said about 67,093 former university students owe 6.5 billion Kenyan Shillings in non-performing loans.
HELB said, “A total of 156,198 accounts valued at 24.2 Billion Kenyan Shillings, are repaying their loans while 67,093 loanees holding 6.5 billion Kenyan Shillings are in default. The loan portfolio is performing at 70 per cent,”.
The Education Loans Board, has however recovered 11.16 million Kenyan Shillings, since the listing notice was announced.
In the last four years, more than two million loan defaulters have been negatively listed on Kenya’s CRBs.
A significant number of those listed though, are for amounts less than 1,000 Kenyan Shillings, mostly borrowed via mobile phone loan apps.
The Higher Education Loans Board (HELB) confession that it’s finding it difficult to trace about 25,000 beneficiaries, has cast doubts on the agency’s ability to recover the billions of Kenyan Shillings it has given to students.
The news partly contributed in the cash shortage which in turn, weakened the ability of the Higher Education Loans Board (HELB), to support university freshers and continuing students, prompting allocation cuts.
As at now, the board has allocated 24 billion Kenyan Shillings in form of loans to 300,000 students studying in various institutions.
The Chief Executive Officer of HELB Charles Ringera, said that Helb has so far disbursed 84 billion Kenyan Shillings since its inception and that last year (2018) another 16 billion Kenyan Shillings was disbursed for the benefit of university students and those in Technical Vocational Education and Training (TVET) institutions.
Mr. Ringers added that “10 billion Kenyan Shillings was channelled to university students while 5 billion Kenyan Shillings was dvanced to those in TVET institutions and a similar amount of loans will this year be channelled to the institutions,”.
All HELB Beneficiaries, are expected to begin repaying their loans, one year after completing studies.
