Former, current and new beneficiaries could miss out on bank loans according to new regulations by the higher education lender Higher Education Loans Board (HELB)
The lender has partnered with the Credit Reference Bureau(CRB) in its bid to recover loans owed by former beneficiaries. The bureau capitalises on information sharing that involves circulation of names of defaulters to all lenders, potentially locking them out of the credit market.
Lenders have in the recent past been keen on having proper information about the borrowers. Sharing of information about borrowers and their repayment habits has a significant impact on efficiency and expansion of the credit markets. (Read: Lenders to Benefit from Accessible Borrowers’ Information)
More than 76,000 beneficiaries of HELB owe the lender amounts exceeding Ksh 8billion and the organization will greatly benefit from the shared information from CRB to recover the loans. HELB says it has been encouraging its low income debtors to come forward and negotiate repayment portions comfortable for both parties to encourage steady clearance of the loans.
Currently HELB beneficiaries get a minimum of Ksh 35,000 and a maximum of Ksh 60,000 depending on the socio-economic status of the student. According to sources, the amount is expected to increase but it has not been established by what margin.
HELB in its expansion program has plans to make loan giving to private university students official through the voucher system. (Read. Daily Nation) which is expected to cover the entire East African region.
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