We don't have powers to write off bad student debts, Helb chief says

Helb Chief Executive Officer Geoffrey Monari. [File, Standard]

The Higher Education Loans Board (Helb) has said it does not have the power to write off bad debts accrued from loan defaulters, but they are engaging them to ensure they keep the end of their bargain.

Helb Chief Executive Officer Geoffrey Monari told the National Assembly Public Investments Committee on Governance and Education that some 563,949 matured accounts relate to students who have completed their studies but not yet secured gainful employment or a sustainable income to enable them to begin loan repayment.

He said one of the biggest challenges they have been experiencing is from those in the informal sector, with Helb having to devise strategies to ensure the defaulters pay their loans.

According to Monari, key among the strategies is that the board is using the Finance Act 2006, where they work with the Kenya Revenue Authority (KRA) to be able to access the self-employed currently in the database, in addition to working with embassies to ensure Kenyans abroad pay the loans.

“We are not only using hard methods; we are also using a carrot-and-stick sort of approach. We understand sometimes someone may not have been paying previously because the income was not sufficient, but if now you are capable of repaying, we negotiate,” Monari told the committee.

He was responding to an audit query, which showed that an analysis of books as at June 30, 2025, revealed 731,789 loan accounts had matured with a running balance of Sh115.4 billion.

Included in the mature loans were 563,949 accounts with a running balance of Sh89.8 billion with no repayment of principal interest, ledger fees or insurance fees during the year.

According to the auditor, the band with the highest loan accounts in default is between 0-5 years, which has a running balance of Sh39.6 billion, followed by 5-10 years at Sh33.4 billion, then 10-15 years at Sh8 billion, while the 15-20 years’ bracket has a balance of Sh2.9 billion.

“In the circumstances, the high default rate may affect the sustainability of the students’ loan management by limiting future student loans availability, raising borrowing costs and increasing loan default risk on the outstanding balance,” the auditor said.

Monari explained that the figure of 563,949 also includes accounts that are still within the grace period.

“During this financial year, there has been a significant improvement in loan recovery. We have traced and recovered from 213,188 accounts. As of last week, we have increased our recoveries, which stood at Sh7.5 billion against an annual target of Sh5.7 billion,” he told the committee.

The Committee vice chairperson, Boyd Were, sought an explanation from Helb on what happens to those who do not repay their loans, saying non-payment has had a ripple effect on capitation for schools.