Corporate News

Helb beneficiaries get one-month amnesty to clear loans

Share Bookmark Print Rating
University of Nairobi students: Helb has given university graduates a one-month amnesty to clear their loans. Photo/Diana Ngila

University of Nairobi students: Helb has given university graduates a one-month amnesty to clear their loans. Photo/Diana Ngila 

By ALLAN ODHIAMBO

Posted  Wednesday, May 8   2013 at  20:25

In Summary

  • Helb says it has granted the one-month waiver to make it easy for the defaulters to pay up and to maximise its loan recoveries.
  • The defaulting loanees will enjoy the waiver if they pay the outstanding dues in lump sum between May 6 and June 6, 2013.
  • Helb has been levying a Sh5,000 penalty for each month that a loanee fails to service his or her dues, starting from the maturity of the loan.

Graduates who have not paid loans borrowed to finance their university education have one more month to do so without suffering the heavy penalties imposed on defaulters by the agency that administers the loans.

The Higher Education Loans Board (Helb) says it has granted the one-month waiver to make it easy for the defaulters to pay up and to maximise its loan recoveries. The defaulting loanees will enjoy the waiver if they pay the outstanding dues in lump sum between May 6 and June 6, 2013.

“The amnesty is aimed at giving the loanees an opportunity to pay outstanding balances due to the board,” Helb said.

The agency has been levying a Sh5,000 penalty for each month that a loanee fails to service his or her dues, starting from the maturity of the loan.

Accounts that are not active, regardless of previous partial payments, also attract similar penalties that were introduced two years ago to try and discourage defaulters.

On Wednesday Helb said 76,128 loanees owe it Sh8.3 billion, signifying the magnitude of the problem. Since its inception Helb has supported 375,783 university students with loans worth Sh40.2 billion.

“Out of these, 68,522 beneficiaries have fully repaid their loans amounting to Sh6 billion,” the fund said.

Some Sh12.1 billion disbursed to 133,569 loanees has not matured while 97,565 beneficiaries are currently servicing loans amounting to Sh13.6 billion, translating to a performance rate of 62 per cent.

Imposition of penalties is one of the strategies Helb has used over the years to coerce defaulters into settling their dues. But thousands of defaulters failed to respond even with the threat of suffering punitive measures forcing the fund to adopt new strategies to keep the default rate down.

Director of Public Prosecutions (DPP) Keriako Tobiko in February formed a 13-member team to help track down and deal with defaulters.

“The team of prosecutors works with Helb to help it meet its recovery targets. They will work as part of the Helb team and not in my office,” the DPP said on Wednesday.

The list of prosecutors includes Esther Michieka, Joseph Ndegwa, Geoffrey Monari, Michael Lelampaa, Peter Ngega and Naftali Michira. Others are Antony Ogola, Rachael Kipkech, Paul Olang, Robi Bocha, Claude Mukindi, Alice Ayonga and Bernadette Masinde.

The impact of the prosecuting team is expected to be felt in the second half of the year after they are fully inducted into the operations of the revolving fund.

“The prosecutors will also go after employers who have failed to notify the board of employees who are not servicing their loans,” said Victor Lomaria, the head of operations at Helb.

1 | 2 Next Page »