Economy

25,626 unable to pay Helb loans as coronavirus bites

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Higher Education Loans Board (HELB) CEO Charles Ringera. FILE PHOTO | NMG

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Summary

  • Some 25,626 beneficiaries of the Higher Education Loans Board (Helb) have re-negotiated or stopped payments due to covid-19 economic hardships that have hurt borrowers’ ability to repay.
  • The State's higher-education funder said so far Sh4.6 billion loans or 16 percent of the Sh28.5 billion in its active loan book have been affected.
  • This highlights the struggle faced by beneficiaries who were making repayments on the strength of their payslips amid layoffs, pay cuts and unpaid leave.

Some 25,626 beneficiaries of the Higher Education Loans Board (Helb) have re-negotiated or stopped payments due to covid-19 economic hardships that have hurt borrowers’ ability to repay.

The State's higher-education funder said so far Sh4.6 billion loans or 16 percent of the Sh28.5 billion in its active loan book have been affected.

This highlights the struggle faced by beneficiaries who were making repayments on the strength of their payslips amid layoffs, pay cuts and unpaid leave.

Helb chief executive Charles Ringera said a number of employers and loanees had been offered a moratorium on repayment or downwards review of monthly rates to ease the financial difficulties.

“So far Helb has faced a reduction of an estimated Sh0.8 billion in loan repayments,” he said.

Helb is supposed to be a revolving fund where beneficiaries who have finished their studies pay back the loans to support a fresh group of students.

Data shows 347,315 loanees are not yet due for repayment as they are either still students or within the grace period before repayment is due.

Beneficiaries are expected to start repaying one year after completing studies and risk blacklisting with credit reference bureaus over defaulting.

Loan defaulters have weakened the agency’s ability to support university freshers and continuing students, prompting allocation cuts.

Early this year, the agency said it was pursuing some 78,328 defaulters holding Sh7.7 billion as at December 31 last year.

It said it has been forced to write off loans worth Sh55.6 million after it established that 653 beneficiaries have since died.