The Higher Education Loans Board (Helb) has raised Sh1.5 billion from external sources to plug funding gaps amid rising defaults in student loans.
The agency said it had raised the funds from partners to supplement government capitation that has failed to keep pace with the growing student population.
“Partnerships with corporates, development partners, counties, trusts and foundations, individuals as well as ministries, departments and Agencies (MDAs) has raised Sh1.55 billion that has gone to supporting over 35,000 students,” said Helb CEO Charles Ringera.
In 2013, Helb started the external resource mobilization drive as it develops new financing models, including corporate foundations and philanthropists in the race to convert to an education bank.
Aside from traditional resource mobilization, Helb is looking at other resource mobilization strategies that include seeking social investors and raising debt both locally and internationally.
“Talks on 1 million USD debt from an international social investor are at an advanced stage,” he said.
According to the Act establishing Helb, the agency is supposed to solicit funds from development partners, corporates, counties and foundations among others to finance its operations.
About 109,661 former university students have defaulted on their Helb loans in the wake of the Covid-19 pandemic that triggered layoffs, business closure and freeze in hiring.
Helb is meant to be a revolving fund where beneficiaries who have finished their studies pay back the loans to support a fresh group of students.
Aside from the high level of unemployment in the country, the ballooning number of defaulters is linked to the migration of beneficiaries to the diaspora in search of greener pastures
Loan defaulters have weakened the agency’s ability to support new and continuing students, prompting a reduction in allocations. The average loan allocation in the current financial year is Sh37,000 per student per year, down from Sh45,000 the previous year.
The agency funds needy students to the tune of between Sh35,000 and Sh60,000 per year, based on their economic background.