Updated Friday, July 19th 2013 at 09:05 GMT +3 Higher Education Loans Board (HELB) has blacklisted more than 68,000 graduates for defaulting on their loan repayments and forwarded their names to the Credit Reference Bureau (CRBs).
The blacklisted borrowers will not be allowed to access credit from any financial institution for a period not less than seven years from the time they complete their last loan repayment installments, according to the new regulations governing the operations of the CRBs.
The latest move comes just after the expiry of an amnesty campaign period where past beneficiaries were allowed to pay outstanding loans in lump sum and have their interest and penalties waived.
The two-month exercise recovered Sh670 million as past beneficiaries rushed to benefit from the interest and penalty-waiving scheme.
However, Chief Executive Charles Ringera said the amount in default stands in excess of Sh7.45 billion.
“We are now members of the credit information sharing system. We have already forwarded the file of defaulters to the Credit Reference Bureau,” Ringera told The Standard in a telephone interview yesterday.
Amnesty campaign
He said the unemployed are also part of these defaulters because people are just becoming evasive but we will follow them. Ringera said prior to the amnesty campaign the number of loan defaulters stood at 75,500 but declined to 68,647 at the end of the campaign on July 6. HELB two years ago started imposing a Sh5, 000 fine for each month that a loan is not serviced from the time of maturity.
The penalty is slapped on beneficiaries regardless of whether or not they had been able to secure an employment opportunity.
HELB loans fall due immediately a beneficiary completes his/her course irrespective of whether they are in employment or not.
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