The Higher Education Loans Board (HELB) has begun bringing persistent loan defaulters to court in an attempt to recoup approximately Ksh10.5 billion in debts due to it by beneficiaries.
Charles Ringera, the HELB’s Chief Executive Officer, stated that the government agency has decided to pursue legal action against 109,000 beneficiaries whose debt has been labeled as “hardcore,” meaning it has not been serviced in over ten years.
He went on to say that the loans board had already filed cases against five hardcore defaulters, despite the fact that it had originally targeted seven.
Ringera noted that HELB takes drastic actions ten years after the defaulter is listed with credit bureaus and private debt collectors have failed.
“When private debt collectors are unable to trace or get where you are, on about the tenth year, which is actually supposed to be the life of the loan, we now start taking prosecution aspects,” Ringera was quoted as saying by The Standard.
HELB is attempting to recoup at least Ksh4.9 billion two years after repayments were halted because to the economy’s destabilization caused by the Covid-19 outbreak.
“We chase one another for like three years before now we say this debt is now approaching hardcore. However, if during the intervening period, you have actually been able to see us, then nobody will list you.
“On KRA, you can see they are paying taxes, on NTSA you can see they are buying their Subarus. This is how we are chasing one another. That is why we become a little bit hard in terms of even thinking about prosecution,” Ringera explained.
After the seventh year, HELB sends a defaulter’s information to private debt collectors. In 2021, the student loans board issued a notice to 85,000 Kenyans, warning them that if they did not pay their loans, they will be posted on the CRB.
Wavi Muigai, HELB Communications Director, told the media that plans were in place to ensure defaulters paid.
“They will be listed on CRB, and there are penalties, Ksh5,000 a month according to the HELB Act. People pay monthly and we keep tabs of those who pay every day,” Muigai stated.
