Jobless Helb defaulters in a bind

The Higher Education Loans Board’s (Helb) treatment of people who pause repaying their student loans is coming under scrutiny following complaints from Kenyans who have experienced it first-hand.

Unknown to many beneficiaries of Helb loans, when they fail to remit their monthly instalments for more than three months, the agency reports them to the credit reference bureaus (CRB).

Mr Evans Osoro learnt this the hard way.

After graduating from Moi University in 2009, he started servicing his loan but when he lost his job in 2015, he could not afford to pay any more.

“I later continued to pay and assumed that all will be well when I continue repaying,” he told the Sunday Nation.

BANK LOAN
The problem is, he did not know that Helb had sent his name to the CRB.

A few months ago, Mr Osoro, who now works with his home county government, approached KCB for a loan to build a house.

“After taking forms from KCB, I was told it wasn’t possible; that I was blacklisted,” he said.

“You can’t access any loan. They look you up and if they find you there, they decline your application.”

Another former Moi University student, who asked for anonymity for fear of reprisals from his current employer, faced the same hassle when he was preparing documents required for his current job.

BLACKLISTED
Having graduated in 2013, he had begun repaying his loan but when he hit hard times, he stopped paying for about six months.

Come last year, he wanted clearance from CRB to meet his employer’s requirements. To his shock, he learnt that he had been listed.

It was only after he paid Sh30,000 to Helb and committed to repay the balance that he obtained a document that enabled the CRB to delist him.

Besides blacklisting former students who default while paying, Helb has come under criticism for making it impossible for graduates to start businesses.

BUSINESS
It leaves many jobless graduates in limbo: They do not have a paying job that would allow them to make regular payments to Helb and they cannot access bank loans to start businesses and earn an income.

“Once listed on CRB, you will not be able to access our mobile-based loans for up to five years.

"However, with CRB clearance, you can access our bank loans and loans from other financial institutions,” KCB posted on its Twitter handle on February 6 when a user asked why they could not access a loan.

Helb told the Sunday Nation on Friday that reporting defaulters to CRBs has compelled Kenyans to start taking loan repayments more seriously.

The agency, through Corporate Communications and Customer Experience Manager Wavinya Muigai, said it lists borrowers with CRBs if they do not start repaying their loans three years after graduating.

“If the defaulter clears the loan in one lump sum payment, we update [CRB data] within 24 hours. We also update CRBs upon commencement of an agreed repayment plan,” Ms Muigai said.