MPs’ HELB Loan Defaults Affecting Operations, Charles Ringera Reveals
The Higher Education Loans Board (HELB) in Kenya is facing financial challenges due to the non-payment of loans by elected leaders.
HELB CEO Charles Ringera reported to the Public Investment Committee on Education and Governance that some members of parliament owe the board money, making it difficult for needy students to access the loans.
The defaulters have contributed to the board being cashless, which has caused the auctioning of funds to authorized banks for disbursement.
This situation means that about 140,000 students in universities and technical and vocational education and training (TVET) colleges may miss out on funding to the tune of Sh5.7 billion.
Ringera called on the defaulting MPs to repay their loans, as their non-compliance is setting a bad precedent for the public. He also urged the National Assembly and the Senate to address the issue and help recover the loans.
Sotik MP Francis Sigei supported Ringera’s call and stated that defaulting on loan repayment denies other needy students access to funding.
Ringera noted that employers are also liable for any loan defaults by their employees, and he revealed that the board has had a high level of compliance across the market.
He also highlighted that waivers given through the credit policy had enabled the board to recover money from students.
Ringera blamed the government’s underfunding for the gap of Sh4.5 billion that the board experienced last year. He noted that this year’s budget of Sh14.8 billion requires the board to have at least Sh7.4 billion to disburse to learners in a half year when schools open.
To address this issue, the board has signed a deal with the government to release funds twice annually, rather than four times, to meet learners’ demands.
The committee chairman, Jack Wamboka, vowed to ensure that all pending bills in government institutions are paid by defaulters.
Ringera warned that if the Parliamentary Service Commission fails to recover the loans, a penalty of Sh3,000 per month on the loanee and the employer will continue to be surcharged. The board will also charge Sh5,000 anytime a loanee fails to engage their account.
In conclusion, the non-payment of loans by elected leaders has caused financial challenges for the Higher Education Loans Board in Kenya, making it difficult for needy students to access funding.
The board has called on defaulters to repay their loans and urged the government to release funds twice annually to meet learners’ demands. The committee chairman has vowed to ensure all pending bills in government institutions are paid by defaulters.
MPs’ HELB Loan Defaults Affecting Operations, Charles Ringera Reveals