The Higher Education Loans Board (Helb) has warned over 67,000 beneficiaries of blacklisting with the Credit Reference Bureau (CRB) over unpaid students totaling to an estimated 6.5 billion shillings.
Helb, on Tuesday, announced that beneficiaries who took up loans since 1975 have up to Mid-May to confirm their repayment status which will enable the student loans body to list defaulters with one of the three credit bureaus.
Once listed on the CRB, helb defaulters will not be able to access any loans with commercial banks, Saccos or a majority of the mobile money lenders.
“In line with the provision of regulation 50 (1) (a) of the Credit Reference Bureau Regulations, financial institutions are required to list both positive and negative performance of all loans,” a notice by Helb read in the local dailies.
The Board said that around 67,093 ex-university students owe the agency 6.5 billion shillings in non-performing loans.
“As a Helb loan beneficiary you are listed by Helb as a positive listing if you’re compliant or have fully repaid your loan or a negative listing if you’re in default,” the notice stated.
“A total of 156,198 accounts valued at 24.2 billion shillings are repaying their loans while 67,093 accounts holding 6.5 billion shillings are in default. The loan portfolio is performing at 70 percent,” noted Helb.
CRB has over two million people listed with the numbers reported to have been spiked by the emergence of mobile loans which make the process of acquiring a loan swift and enticing.
Helb has previously raised concern on its ability to recover billions given to students in the form of student loans when it publicly admitted its inability to track around 25,000 beneficiaries.
Helb has previously tried different tactics to recover the money loaned to students decades after they finish their courses with the most recent being the threat to arrest defaulters while the Ministry was under CS Amina Mohamed. The arrest threat did not bear fruits forcing the body to resolve to blacklist the defaulters.
Helb depends on the loan money repaid by students to be able to finance fresh students to go through their university with the hope that they will pay back to enable the body to finance more needy students. Failure of a large number of ex-students to repay the loans has seen the body result in allocation cuts which has in turn affected students coming from the needy background.
Helb beneficiaries are given up to one year after completion of studies to embark on servicing the loan failure to which it begins to accumulate interest of 4 percent per annum.