The architects of the Higher Education Loans Board (Helb) had the best intentions at heart. In fact, the board’s tagline says it all ‘Financing higher education in Kenya.’ The loan is granted to students without the lending firm’s assessment of one's assets or credit worthiness. The amount awarded is solely pegged on the borrower’s level of need and verifiable bonafides.
The application process is without bottlenecks; a name here, a signature there, a stamp, submission of the forms and its finished! You sit and wait for the text message informing you that the money has been disbursed. Students celebrate once the money hits there bank accounts and no one mentions the word loan. Majority mention Helb as if it were a lottery they won.
The indulgence then begins with impulse buying. Strictly speaking, Helb is a loan to be repaid with interest and the amount accrues penalty depending on how long one takes before they begin repaying. But few know how much interest or penalty the loanattracts.
The grace period before commencement of repayment is a year after the date of graduation. The monthly penalty is Sh5,000. This means for every year you will be unemployed, you will be paying Sh60,000. Is this not way more than Helbgave you each academic year?
It takes an average of two years or four before one can secure a decent job. For four years, the principle, interest and fines will amount to Sh500,000. As if that is not enough, you will have your name blacklisted at the Credit Reference Bureau (CRB) with a huge debt to it. No other lender can grant you a loan unless you get a clearance certificate from CRB. And charges for the certificate is Sh2,000-which comes only after clearance of the loan in question. Worse still you will not secure certificate of good conduct. Helb loan I daresay, is outright usury. It’s one of the choices that many people regret after graduation. Fine, loans are not bad, it’s how we use them that can either make or break us. Opati Gideon Ongure, Maseno University