67,000 Helb Loanees risk blacklisting

More than 67,000 beneficiaries of the Higher Education Loans Board (Helb) financing risk being listed with the Credit Reference Bureaus (CRBs) over unpaid student loans estimated at Sh6.5 billion.

Helb Tuesday gave beneficiaries of the State student loans since 1975 up to Mid-May to confirm their repayment status, setting the stage for listing defaulters to one of the three credit bureaus.

The listing will jeopardise their chances of borrowing from commercial banks and saccos.

“In line with the provision of regulation 50 (1) (a) of the Credit Reference Bureau Regulations, financial institutions are required to list both positive and negative performance of all loans,” said Helb in a notice posted in local dailies.

“As a Helb loan beneficiary you are listed by Helb as a positive listing if you’re compliant or have fully repaid your loan or a negative listing if you’re in default.”

The board yesterday 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 Helb.

In the last four years, more than two million people out of a population of around 45 million have been negatively listed on Kenya’s CRBs.

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

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 freshmen and continuing students, prompting allocation cuts.

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