HELB decries Sh6.1Bn budget cuts for students’ loans

By Steve UMIDHA

The higher education loans board (Helb) is decrying in excess of Sh6.1Billion in budget cuts from the exchequer, saying the cumulative slashes in the last two financial years, have hindered its ability to loan out to university learners.

As a result, coupled with unpredictable and often delayed disbursements by the national treasury, Helb officials yesterday said an estimated 142, 361 students are now affected and are at risk of losing out on such advances if the government fails to step in.

“We continue to make an appeal that unutilized funds be made available if we are to address the shortfall,” offered Helb’s Chief executive Charles Ringera, adding that cash crunch at the board has seen students in public universities and technical and vocational education and training (TVET) colleges miss State loans.

About 53 per cent of Helb budget is funded by Kenya’s exchequer and 47 percent from loan recovery efforts, with the latter proving a contest for the institution.

The education’s body, according to Ringera is now courting private sector institutions including foundations to raise enough cash in an effort to bridge the prevailing deficit.

“We have since raised about Sh2.1Billion from these partners – about 40 of them, outside the treasury funding which has benefitted 55 students,” confirmed Ringera.

He was speaking during the launch of the HELB Mobile Wallet and HELB M-PESA Mini App. In partnership with Safaricom, at this year’s universities consultative forum.

The revolutionary HELB Mobile Wallet will see students receive student loans direct to their M-PESA account, as well as withdraw funds, repay loans, apply for subsequent loans, view their loan status and access their statements all from an Android and iPhone app.

To date, Helb approximates that Sh147.5 billion has been disbursed in terms of students’ loans in the last 10 years.

And while the repayment process (from borrowing students) has been a challenge to the institution – at the rate of 50.11 percent, non-performing loans advanced to former university students as well as reduced Treasury allocation, has seen the firm’s ability to meet its obligation brutally limited.

In the financial year 2023/2024, Helb’s Sh25Billion initial request to the Treasury, was trimmed down to Sh17billion, meaning, the institution’s Sh8billion deficit has restricted it to operate effectively, leaving many students exposed as a result.

This comes after the Helb CEO last month while appearing before Parliamentarians said that the students will have to wait till the Treasury releases Sh5.7 billion for onward disbursement to them.

The majority of loan applicants come from poor households and require financial support from Helb to pay for their tuition and upkeep.

“The more might not be coming,” said a representative from the Treasury yesterday while reacting to calls for more allocation.

The Kenyan government through the ministry of education had in 2019 embarked on efforts to find loan defaulters and the employers who assist them, deploying agents to examine reams of viable information as it seeks to recover in excess of Sh7.2billion.

Former Education minister Amina Mohamed said at the time that the High Education Loans Board (Helb) was tracking down over 74,000 beneficiaries of the State-backed fund manager to recover the billions of shillings.

This the former education CS said would be achieved in partnership with employers, telecommunication firms as well as other government agencies to recover the funds meant to aid new learners’ higher education.

“We will go for them and we want employers and telecommunications firms to help as well,” she said during the launch of Helb’s five-year strategic plan that aims to raise Sh90.7billion over the target period.

That strategic plan ends in June this year, and has since seen an impressive 72 percent loan repayment rate, according to Helb’s board Chairman Ekwee Ethuro.

Suggestions to establish the National Skill and Funding Council that amalgamates Helb, TVET and University Funding Board to bridge the current higher education funding gap of up to 45 per cent, are some of the plans being put forward to address the aforementioned challenges. If provoked, it will see the end of Helb.