5 February 2011

Kenya: Loans Board Tracks Down Defaulters

Nairobi — The Higher Education Loans Board has stepped up its efforts to recover millions of shillings it lent to students.

Chief executive officer Benjamin Cheboi, said they were working with the Kenya Revenue Authority and employers to trace the defaulters.

"With the help of the government, banks and others we have accessed vital information on the beneficiaries and we are now recovering our money from them," said Mr Cheboi.

However, he did not say how much the board has recovered so far. Mr Cheboi said that so far nearly 100,000 loanees were repaying their loans and the this is likely to increase this year.

"Many beneficiaries are now knocking on our doors ready to pay the loans after they are denied loans by lenders such as banks who are helping us enforce the Finance Act of 2006," said Mr Cheboi.

At least 300,000 students from public and private universities have received loans since it was started in 1974.

Despite a stiff penalty of Sh5,000 for each month that has remained unpaid since the loans fell due, the number of defaulters has continued to increase annually.

Most defaulters cite lack of jobs after completing their studies but even some of those who are employed have skipped repaying their loans.

Last November, debt collectors were enlisted to track down defaulters of government university loans.

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