President Uhuru rejecting HELB Bill seeking to lower Interest has Kenyans fuming

By Benjy Kwabe,

President Uhuru Kenyatta rejected passing into law the Higher Educations Loans Board Bill, that sought to cap interest from 4% down to 3%.

The HELB bill initiated by nominated MP Gideon Keter, was also proposing to increase the grace period for repayment of the loan to five years.

The rejection of the bill by the Head of State has irked Kenyans on Twitter (KOT), as they complained over the increased living standards and fuel prices, becoming a major challenge to most citizens commuting to work on a daily basis. 

Some Kenyans were astonished by the failure of the president to acknowledge the harsh conditions the youth were enduring with many defaulters still unemployed in an economy starved of job opportunities, yet paying more for essential commodities above the interest.

“The principal object of this bill is to amend the Higher Education Loans Board Act to waive the imposition of interest on the principal amount of a loan advanced to the youth and persons with a disability until such a time as they have secured their first employment,” the bill stated.

Whereby the Bill sought a reduction of interest on loans from the current four percent as a measure to safeguard graduates from paying hefty amounts without having secured financial stability.

HELB imposes a KSh 5,000 monthly penalty for defaulters which has left many unemployed youths who were beneficiaries unable to pay, resulting in penalties accruing.

A loanee who fails or neglects to satisfy the requirements within the stipulated time shall be guilty of an offense and liable to a fine not less than KSh 5,000 in respect of each loan deduction that remains unpaid.

Owing to financial constraints experienced by the board, the deduction in interest could render close to 93, 650 students missing out on funding from the parastatal in the next five years.

“If the three per cent interest is passed, the board will lose an opportunity to collect KSh 693 million annually, translating to KSh 3.4 billion in five years,” HELB CEO Charles Ringera said.

"The impact will be a total of 18,730 needy students being funded at an average rate of KSh 37,000 annually missing Helb Loans. In five years, a total of 93,650 students will miss out on funding," Ringera said.

 “We have 107,000 beneficiaries who defaulted on loans totaling nearly KSh 10 billion, including those who left the country for better opportunities abroad. Those seeking greener pastures, especially in Northern America. If you don't repay the loan or come for a discussion with us, the law says we charge your account a penalty of KSh 5,000 for being in default," he said.

Post a Comment

Post a Comment