This archive report was first published on 13 August 2019.
Since its inception in 1995, the Higher Education Loans Board (HELB) has financed over 645,000 students to the tune of Sh72 billion. However, the board's model has led to a debt trap, making it difficult for graduates to secure employment and access funding.
According to HELB's internal reports, more than 136,000 beneficiaries are servicing their loans, while about 85,000 beneficiaries with loans worth over Sh8.5 billion are not. The board attributes 30,000 of these defaulters to Kenyans in the diaspora, but the reality is that most defaulters are Kenyan graduates unable to secure employment.
With over 264,000 loans yet to mature for collections, the default rates are expected to rise. The economy is not creating enough jobs to absorb all these graduates, making it impossible for them to secure employment and further exacerbating the problem.
Government, which is the largest employer, and other major corporations require a HELB clearance form before hiring a graduate. A graduate blacklisted by the Credit Reference Bureau (CRB) cannot get the clearance certificate either from HELB or from CRB, condemning them to eternal poverty.
Published on August 13, 2019, the listing blocks industrious and enterprising graduates from accessing loan advancements from any financial institution, throwing them into a debt trap.
