Public Investment Committee (PIC) wants Helb to put measures in place to recover funds from graduates in the diaspora by working closely with the Ministry of Foreign Affairs and the Department of Immigration.
The committee made the recommendations following the scrutiny of Auditor General Edward Ouko’s report on the financial statements of the State backed student loan facility for the three year period to June 2015.
Mr Ouko said matured loans to students, loan interest and user charges as at June 30, 2015 totaled to Sh29,163,926,490 out of which an amount of Sh3,293,818,387 was recovered during the year, leaving a balance of Sh25,859,862,592.
Parliament has directed the Higher Education Loans Board (Helb) to pursue beneficiaries employed in the Jua Kali sector and private businesses in order to recover part of the Sh24.6 billion in matured loans that remained uncollected as at end of June 2015.
Public Investment Committee (PIC) wants Helb to put measures in place to recover funds from graduates in the diaspora by working closely with the Ministry of Foreign Affairs and the Department of Immigration in order to enforce repayment of loans.
“The committee recommends that the board pursues its beneficiaries who are employed in the informal sector such as Jua Kali and private business in order to increase funding of the revolving funds to the ever increasing number of needy students,” Aden Keynan, who chairs PIC, says in the 21st report on the audited accounts of State corporations.
PIC said despite Helb making significant achievement in the recovery of outstanding loans from former students during the period under review compared to the previous years after putting in place measures to recover the loans, the amount repaid is still inadequate.
“The amount recovered still appears inadequate compared to the total matured loan portfolio amounting to Sh24,613,622,148 as at June 30, 2015.
“The committee recommends that the chief executive officer of the board (Charles Ringera) undertakes a loan analysis exercise including age analysis for each of the loans and recommend the necessary measures to recover the outstanding loans,” Mr Keynan said.
The committee made the recommendations following the scrutiny of Auditor General Edward Ouko’s report on the financial statements of the State backed student loan facility for the three year period to June 2015.
Mr Ouko said matured loans to students, loan interest and user charges as at June 30, 2015 totaled to Sh29,163,926,490 out of which an amount of Sh3,293,818,387 was recovered during the year, leaving a balance of Sh25,859,862,592.
“When the provision for bad and doubtful debts of Sh1,299,361,105 is taken into account, the outstanding matured loans stood at Sh24,613,622,148 as at June 30, 2015,” he said.
Mr Ouko said no aging analysis was availed for audit review to determine the status of old loans.
In response to the auditors, Mr Ringera told PIC that the board has continued to reduce the nonperforming loans by using innovative ways to net loanees and increase loan recovery.
“This has resulted in continuous growth in recoveries from year to year,” he said adding that the board had increased the loan repayment channels, which has increased the convenience and efficiency for loanees to remit their loan repayments.
Mr Ringera told MPs that Helb operates collection bank accounts in ten banks, online payment channels, mobile money service providers and the Kenya Revenue Authority for ease of collection by loanees and employers.
“Helb loan repayments can be made through mobile service providers (M-Pesa and Airtel Money) and e-Commerce - Credit and Debit card – both debit and credit (VISA and MasterCard) can be used to make loan repayments,” he said. learning devices.
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