The University of Nairobi's attempts to forward the names of defaulting students to credit reference bureaus will be opposed, the bureaus warn.
The university Monday warned it would submit to the credit bureaus the names of more than 500 graduates who studied under the self-sponsored programme and had declined to pay fees arrears amounting to more than Sh200 million.
But the bureaus reckon the University of Nairobi application to forward the names will not be accepted because the provision of goods and services on credit is not its core business.
The search for defaulters comes as the university goes through a cash crunch following a drop in students' enrolment and reduced government funding, prompting cost-cutting, layoffs and hiring freeze.
Deputy vice-chancellor Isaac Mbeche said those who fail to pay would have their names published in newspapers together with the amount they owe the university.
"If they do not respond again, we will now refer them to credit reference bureau for action," said Prof Mbeche as he asked those affected to pay for the services that the university rendered to them.
But the university will first need to apply to the Central Bank of Kenya through the bureaus for it list fee defaulters.
"Its application will certainly be rejected. The university's core business is not offering goods and services on credit," said Sam Omukoko, managing director at Metropol.
In the last three years, 2.7 million people have been negatively listed on Kenya's Credit Reference Bureaux, according to a study by Microsave, a consultancy that advises lenders on sustainable financial services.
The study found 400,000 had been listed for an amount less than Sh200.
Study without fees
Prof Mbeche disclosed that in order to attract students, many schools at the university allowed the learners to study without fees deadline except before the examinations.
However, he said most of the students used the chance not to pay fees, forcing the institution to incur losses.
Most of the students graduated but Prof Mbeche said they have no certificates.
"We had a situation where some university staff were aiding such graduates to get their certificates but the loophole was sealed," he said.
"We now have an independent team that is tasked with vetting those who get their certificate in order to ensure that there is no fraud."
University of Nairobi cash flow has been the hardest hit by the sharp drop in the number Kenya Certificate of Secondary Education candidates scoring the C+ and above grade required for university, entry cut enrolment.
Data from the Kenya National Bureau of Statistics show the university's enrolment declined to 67,827 this year from 98,715 in 2015 -- making it the first drop since the government started making public student numbers in the 1990s.
The low entry grade has derailed the lucrative parallel degree, which over the past decade had been money minting machine for the public institutions of higher learning.