HELB unveils new tactics to recover Sh32bn from defaulters

By Newsflash Writer

The Higher Education Loans Board (Helb) has rolled out fresh, smarter policies aimed at recovering Sh32 billion owed by 256,000 loan defaulters.

The recovery drive will involve engaging employers, reaching out to past beneficiaries, and tightening accountability measures. Helb Chief Executive Officer Geoffrey Monari revealed that, as of June 30, 32.5 per cent of the loan portfolio was in default. Since 1974, the government has disbursed Sh179 billion to more than 1.7 million Kenyans, with 67.5 per cent of beneficiaries currently repaying their loans.

“As of June 30, 2025, 67.5 per cent of our loan book is performing, but 32.5 per cent remains at risk, representing Sh32 billion in arrears from about 256,000 Kenyans. We are responding with employer engagement, targeted outreach to past beneficiaries, smarter repayment policies, and enhanced accountability,” Mr Monari said in a social media update.

Helb is also offering incentives to encourage prompt repayment. “If you pay your loan in a lump sum, you get an 80 per cent penalty waiver. This step will ease repayment and motivate compliance. We believe, together, we can turn this situation around,” he added. The agency has so far raised Sh3.3 billion from 43 partners, including county governments, corporates, and development organisations.

Innovative financing models

In addition, Helb is exploring innovative financing models such as social bonds and crowdfunding to boost resources. “We’ve already mobilised Sh3.3 billion from our partners and are now pursuing new funding approaches like social bonds and crowdfunding,” Mr Monari noted. He defended sweeping reforms in the higher education funding system as “fair, data-driven, and sustainable,” but admitted that communication with the public had been lacking.

“We could have done more to explain why the changes were essential, the state of our universities, and the future we envision. We didn’t fully paint the picture of the crisis we sought to avert or the urgency for reform,” he acknowledged.

The new funding model replaces the flat-rate system with a needs-based approach, assigning students to one of five financial bands determined by an updated Means Testing Instrument (MTI). The MTI uses 12 socio-economic indicators such as household income, parental occupation, number of dependents, orphan status, location, and disability.

“The biggest shift is that funding now matches actual need, not assumptions. Students in Band 1 receive 95 per cent of education costs covered — 70 per cent as a scholarship and 25 per cent as a loan — plus Sh60,000 annual upkeep. Band 5 students get 30 per cent as a scholarship, 30 per cent as a loan, and Sh40,000 in upkeep. We are digitising and modernising MTI to reflect the realities of today’s Kenya,” Mr Monari explained.

Total disbursements

During the 2024/2025 financial year, Helb disbursed Sh36.5 billion in loans and Sh16.9 billion in scholarships to 702,000 students. “By June 2025, the Sh53.4 billion allocated had been fully disbursed. While there is still a funding gap, we are working with the National Treasury and partners to close it. The progress is tangible, and we are proud of it,” he said.

Mr Monari admitted that implementing change in the sector has been challenging but insisted that the old funding structure was unsustainable. “We are no longer funding blindly or pretending all students have the same needs. Nor are we assuming universities can operate on empty promises,” he said.

“This new model promotes equity, protects the poor, rewards merit, restores public trust, and sustains quality,” he emphasised. Calling on stakeholders to support the changes, he warned that reverting to the old system would endanger the future of higher education. “Now more than ever, we cannot afford to hide from reality or cling to broken systems,” he cautioned