Students Risk Missing HELB Due to Budget Cuts and Delayed Disbursements
The Higher Education Loans Board (HELB) has expressed concern over the Ksh6.1 billion ($56 million) budget cut from the exchequer, stating that the cumulative reduction in the past two financial years has impacted its capacity to effectively loan money to university students.
The reduction, coupled with unpredictable and often delayed disbursements by the National Treasury, has resulted in approximately 142,361 students being affected and are at risk of losing out on loans if the government does not intervene promptly.
During the launch of the HELB Mobile Wallet and HELB M-Pesa Mini App, in partnership with Safaricom, HELB CEO Charles Ringera called for unutilised funds to be made available, stating that the cash crunch has resulted in public university and technical and vocational education and training (TVET) college students missing state loans.
Ringera said the education body is courting private sector institutions, including foundations, to raise sufficient funds to bridge the current deficit. About 53% of HELB’s budget is funded by Kenya’s exchequer, and 47% comes from loan recovery efforts, which have proven to be a challenge for the institution.
HELB has raised about Ksh2.1 billion ($19 million) from these partners, benefiting 55 students outside of the treasury funding. The new HELB Mobile Wallet will enable students to receive loans directly to their M-Pesa account, withdraw funds, repay loans, apply for subsequent loans, view their loan status and access their statements all from an Android and iPhone app.
HELB estimates that Ksh147.5 billion ($1.4 billion) has been disbursed in student loans in the last ten years. Although the repayment process has been a challenge for the institution, with a rate of 50.11%, the inability to meet its obligations has been brutal due to non-performing loans advanced to former university students and reduced Treasury allocation.
Despite the current challenges, the introduction of the HELB Mobile Wallet and the partnership with Safaricom is a significant step in streamlining the disbursement and recovery process, allowing for greater efficiency and a more direct flow of funds to students.
Students Risk Missing HELB Due to Budget Cuts and Delayed Disbursements