More than 38,314 former university students in the country have defaulted on their HELB(Higher Education Loans Board) loans in the 10 months from February 2020 due to the effects of COVID-19 that resulted in mass layoffs, closure of businesses, and freeze of hiring.
This number now brings the total defaulters to 116,642 from 78,328 recorded in December of 2019, according to data presented to parliament on Wednesday.
This means that more than Ksh. 11.3 billion is in default out of Ksh 45.5 billion given to students in loans, giving HELB a non-performing ratio of 24.8% way above the average 13.6%.
According to HELB CEO Charles Ringera, “The total mature outstanding debt is Sh45.5 billion held by 323,666 loanees out of which 207,024 are currently repaying their loans worth Sh34.2 billion.”
This development highlights the struggles former students are facing due to the effects of COVID-19 for those in formal employment or doing business.
The country was in partial, lockdown for several months after the first case of COVID-19 was recorded in the country.
For the first time in 12 years, the country’s economy has shrunk resulting in more than 1.72 jobs lost directly or indirectly.
However, the agency said that it was pursuing more than 78,328 defaulters holding some Ksh. 7.7billion.