Helb recovers 7pc of defaulted loans in two-month amnesty

What you need to know:

As of Friday noon, 7 per cent of defaulted loans (Sh8.3 billion) had been cleared with figures expected to rise come the end of the exercise on July 6.

With a day left to the two-month amnesty deadline, Higher Education Loans Board (Helb) has recovered a record Sh620 million out of its outstanding loans which will be used to fund a bigger number of students.

As of Friday noon, 7 per cent of defaulted loans (Sh8.3 billion) had been cleared with figures expected to rise come the end of the exercise on July 6.

This comes after the agency added another 30 days to its one-month waiver which ran between May 6 and June 6 on the back of an overwhelming response by beneficiaries keen to settle loans on the last week of the exercise.

READ: Relief for loan defaulters as Helb extends amnesty

Officials at Helb are confident loan payout in the second round of the amnesty will rise beyond the last.

“By the end of tomorrow (Saturday), we shall have raised a total of between Sh650 –Sh700 million (for two months),” Helb CEO Charles Ringera said Friday.

Records at Helb shows Sh240.6 million had been paid by July 3 compared to Sh207.1 million last month similar date.

The student financier floated the amnesty to make it easy for the defaulters to pay up and to maximise its loan recoveries.

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.

Helb received Sh4.9 billion from the Treasury for the current financial year against its demand of Sh14.4 billion.

Meanwhile, some of the beneficiaries interviewed by the Business Daily expressed content with the exercise and even asked for extension of the amnesty.

“I am happy now that I have cleared my arrears (Sh77,500),” said Bharat Bhatt, a 1983 graduate of the University of Nairobi.

The agency is keen to expand its revenues in the face of a surging number of students seeking financing.