Helb gives employers a month to remit arrears or risk lawsuits

University graduates queue for services at the Higher Education Loans Board offices at Anniversary Towers in Nairobi. FILE 

By Neville Otuki, notuki@ke.nationmedia.com

In Summary

• Agency adopts new strategies to crack down on defaulters and solve rows.
• The board is owed Sh5.9 billion in loans that have matured but are not being serviced.

The Higher Education Loans Board (Helb) has given employers one month to remit Sh30 million they collected from beneficiaries of the scheme or face lawsuits.

However, the university education financier said it would also embrace diplomatic means to recover the arrears and fines from employers.

“We will engage CEOs of defaulting companies in the next 20 to 30 days as part of our alternative dispute resolution mechanism,” Helb chief executive Charles Ringera said on Monday.

Mr Ringera said that a team of 15 in-house prosecutors have been endorsed by the office of the Director of Public Prosecutions to represent Helb in litigation.

“Should the talks fail to yield any fruitful development, we will move to court to demand our dues,” he said.

The Federation of Kenya Employers (FKE) called upon its members to capture details of their entry level employees and promptly effect deductions from beneficiaries.

“It is illegal for employers not to observe this requirement by law. They are perfectly aware they should make deductions from pay of this group of employees. There is no bargaining,” said FKE chairman Erastus Mwongera.

“Those who fail to observe this requirement risk court battles.”

The board is owed Sh5.9 billion in loans that have matured but are not being serviced. Mr Ringera said Sh43.9 billion has been disbursed on revolving basis to over 400,000 beneficiaries since 1995.

READ: Helb loan collections hit Sh3.3 billion in record growth

The Helb Act requires employers to notify the board within three months of employing a beneficiary of the fund.

Employers are fined Sh3,000 per month for each defaulting employee while individual beneficiaries attract a Sh5,000 fine.

Helb, Mr Ringera said, is establishing linkages with diplomatic missions to get information on Kenyans abroad who are not repaying the loans.

“We are first targeting nations such as the UK, US and South Africa, where a lot of Kenyans work,” said Mr Ringera.

He said about 30 per cent of Kenyans in the diaspora are yet to honour their payments. To facilitate payment, Helb will tap into international money systems such Western Union, MasterCard and Visa.