298,511 Higher Education Loans Board (HELB) borrowers are in default with a combined debt of Ksh32.81 billion as at the 2023/24 financial year, a report reveals.
Of all the accounts that have reached maturity for repayment, only 443,501 accounts, totaling Ksh64.01 billion, are currently repaying their loans.
HELB revealed that 710,107 borrowers, with a combined debt of Ksh41.73 billion, have loan accounts that are not yet due for repayment. Meanwhile, 986,674 loan accounts, totaling Ksh127.81 billion, have reached their maturity and are now in the recovery phase.
According to the report, HELB supported 606,329 students with a total expenditure of Ksh33, 452,605,493.
According to the fund’s disclosures, this increase brought the total number of beneficiaries to 1,696,781, with the total amount disbursed reaching Ksh169.54 billion.
HELB CEO Charles Ringera stated that the fund provides financial education to all applicants to help them manage their debts more effectively.
“HELB does expose applicants to comprehensive financial literacy material when onboarding first time applicants. We subject applicants to financial literacy material where students read the literacy material before being tested on ten questions drawn from the key thematic concerns from the passage. Upon meeting a 70 per cent pass mark, the applicants are allowed to proceed with the loan and scholarship application process,” said Ringera.
The fund has implemented several strategies to address defaulted loans. It communicates with borrowers through various channels, including SMS, email, social media, and direct phone calls, to remind them of their obligations and explain repayment options.
To encourage timely repayments, it offers incentives such as penalty waivers for prompt or bulk payments. Flexible repayment plans are also available, tailored to each borrower’s financial situation, and may include income-driven plans, extended terms, or temporary deferrals.
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The fund also enhances its monitoring and enforcement efforts by tracking defaulted accounts more closely and applying stronger measures, including legal actions, credit bureau reporting, and engaging loan recovery agencies.
Additionally, it partners with employers, financial institutions, and other stakeholders to increase loan repayment awareness and facilitate direct deductions from salaries or bank accounts.
Recently, HELB announced that its application portal for the 2024-2025 academic year is now open under the new funding model.
Additionally, the fund has implemented mechanisms to mitigate the risk of loss if a beneficiary dies before repaying the loans.
HELB applicants must provide a valid email address, telephone number, KCPE and KCSE index numbers, a passport-sized photo, and details of their parents or guardians, as well as information about guarantors.
By Frank Mugwe
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