HELB Will Now Take Loan Defaulters To Court

The Higher Education Loans Board (HELB) has established new techniques to recover over 10.5 billion shillings owed to it by beneficiaries.

According to HELB Chief Executive Officer Charles Ringera, the government agency resolved to take legal action against 109,000 beneficiaries whose debt was flagged as “hardcore,” meaning it had not been serviced for close to 10 years.

Ringera further said that the loans board had already filed cases against five hardcore defaulters, even though it had initially been targeted seven of them.

He further mentioned that HELB takes extreme measures, i.e., ten years after the defaulter is listed with credit reference bureaus and private debt collectors’ efforts fail.

“When private debt collectors are unable to trace or get where you are, on about the tenth year, which is supposed to be the life of the loan, we now start taking prosecution aspects,” Ringera was quoted as saying by The Standard.

HELB is targeting to collect at least 4.9 billion shillings two years after repayments were disrupted due to the Covid-19 pandemic’s destabilization of the economic standards in the country.

HELB realized that some of the beneficiaries chose not to repay their loans despite numerous attempts by the government agency to recover the money from them.

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“We chase one another for like three years before now we say this debt is now approaching hardcore. However, if, during the intervening period, you have actually been able to see us, then nobody will list you.

“On KRA, you can see they are paying taxes, on NTSA, you can see they are buying their Subarus. This is how we are chasing one another. That is why we become a little bit hard about even thinking about prosecution,” Ringera explained.

In 2021, the student loans board put 85,000 Kenyans on notice stating that they risked getting listed on CRB if they fail to pay their loans.

In March 2022, more than 75,000 university freshmen received their first disbursements of State loans, ending months of pain that had met them at the beginning of their studies.

Loan defaulters have weakened HELB’s ability to support the university and technical college students, prompting allocation cuts and increased reliance on the Treasury.

The latest data from HELB shows loan accounts in default increased from the 106,443 recorded in December 2020, with unpaid loans standing at 10.9 shillings billion.