HELB Chief Executive Officer (CEO) Charles Ringera stated that most of the non-performing loans are from jobless Kenyans or those who lost their jobs after the COVID-19 pandemic hit the country.
Further, he revealed that 85,000 Kenyans have not paid their Higher Education Loans Board (HELB) loans, amounting to Sh9.5b. He called on defaulters to pay.
The most affected students are drawn from universities and Technical and Vocational Education and Training.
“The supplementary budget estimates for 2020-2021, there was an adjustment of Sh2.2 billion because there were no resources from Treasury. On the flip side of that, we have also lost Sh1 billion due to COVID-19 impact on loan recoveries,” he said.
Ringera was said this while addressing a congregation during the handing over ceremony of the Elimu Afya Fund by the United States Agency for International Development (USAID).
HELB had an approximated budget of Sh15.5 billion but will not get Sh12.8 billion, stating that some students might drop out of school due to lack of finances.
“We hope to fund about 450,000 students both in TVET and Universities at a total cost of about Sh12.8 billion. That means about 95,000 students will go unfunded this year. They have just resumed their classes and we are worried about how we are going to manage that situation. That is how the situation is since there are no revenues flowing into the country and people are unemployed, so they cannot be able to pay their loans,” he said.
The students who will benefit from the HELB facility will get an average of Ksh38,000, down from Ksh45,000.
“For the TVET students, they are still getting their average of Sh40,000. It is only we have reduced the number of the students who will benefit,” he explained.
For the new entrants from high school, Ringera said, HELB will only be capable to support 80,000 students. The program was to finance 110,000 students at a total cost of Sh4 billion.