65,000 Helb loan defaulters ignore CRB listing threat


Students queuing at HELB offices in Nairobi. FILE PHOTO | NMG

More than 65,000 beneficiaries of the Higher Education Loans Board (Helb) were unmoved by the threat of being listed with the Credit Reference Bureaus (CRBs) over unpaid student loans estimated at Sh6.5 billion.

The Helb last month gave beneficiaries of the State student loans since 1975 up to mid-May to confirm their repayment status, setting the stage for listing defaulters on credit bureaus.

Only 1,879 persons started repaying their old loans after listing threat out of the estimated 67, 000 that owe the student loans agency billions in unpaid debt.

“As at May 24, a total of 1,879 loanees started repaying their loans,” the Helb said in statement yesterday.

“For those who have engaged with us and started repaying, the listing (CRB) will be positive. For those loanees who have not heeded to the notice, the listing will be negative.”

The listing is expected to jeopardise their chances of borrowing from banks and saccos.

The board last month said about 67,093 former university students owe the agency Sh6.5 billion in non-performing loans.

"A total of 156,198 accounts valued at Sh24.2 billion are repaying their loans while 67,093 loanees holding Sh6.5 billion are in default. The loan portfolio is performing at 70 per cent," said the Helb. The Helb recovered Sh11.16 million following the listing notice.

In the last four years, more than two million loan defaulters have been negatively listed on Kenya’s CRBs.

A significant number of those listed are for amounts less than Sh1,000, mostly borrowed on mobile phone apps.

The Helb earlier said it was finding it difficult to trace about 25,000 beneficiaries, casting doubts on the agency’s ability to recover billions of shillings lent to students.

This has partly contributed to the cash shortage, which has weakened its ability to support university freshers and continuing students, prompting allocation cuts.

Beneficiaries are expected to start repaying one year after completing studies.