HELB raises alarm over surge in loan defaulters

The Higher Education Loans Board (HELB) has raised concerns over the ballooning number of Kenyans who are not servicing their student loans.

HELB Chief Executive Officer Geoffrey Monari, in a TV interview Tuesday, revealed a staggering loan default rate, calling it a national crisis that threatens the future of education financing in the country.

“Some 51,594 graduates who completed their studies over 20 years ago have not started paying back their loans, which together amount to over Sh8 billion,” he said.

“A further 23,786 individuals who left school between 12 and 17 years ago are holding on to unpaid loans worth Sh6.6 billion.”

“Many in this group cite the current economic challenges, including unemployment and the high cost of living, as the reason for their default,” he said.

“The situation is not only alarming in terms of numbers but also in the breakdown of default by profession.”

Monari says among accountants, only 11 per cent—approximately 2,420 individuals—are paying, while only 2,000 have fully repaid their loans.

“We have given loans to over 23,000 lawyers, and only 2,644 have paid their loans; the rest are not servicing their loans,” Monari stated.

In the medical field, Monari says just 2,115 doctors are actively repaying, while a further 11,701 are in default.

Engineers are faring no better, with only 1,594 out of 24,803 borrowers having completed their repayments, and only 894 are currently paying.

Teachers appear to be making some effort, with around 44,000 currently servicing their loans.

Monari expressed disappointment that professionals, many of whom are presumed to be earning decent incomes, continue to neglect their loan obligations.

To counter this growing crisis, HELB is considering a number of enforcement measures.

“These include listing loan defaulters with Credit Reference Bureaus (CRBs), which would affect their credit ratings and access to financial services,” Monari said.

Additionally, HELB is in talks with professional bodies to require loan clearance certificates as part of the annual license renewal process.