Following a petition filed by some HELB beneficiaries, the High Court stops HELB from imposing high fines and interests to its clients.
HELB, a board that provides the needy in terms of finance has helped many Kenyan students achieve their dreams but its interest rates has been high.
The HELB loan beneficiaries including Davis Nguthu, Wangui Wachira and Ann Mugure went the High Court of Kenya to sue HELB for making it difficult for them to pay the loans due to their high fines and interests.
HELB had planned to publish the names and photos of loan defaulters. The publication of the defaulters was planned to be done on local dairies in November 2020. But the three thought it unfair and walked to the High court to pursue justice on the matter.
Justice Alfred Mabeya ruled against the loan board saying that printing of names and photos of defaulter would be unconstitutional.
“A declaration hereby issues against the respondent (Helb) that by imposing interest amounts and penalties or fines that exceed the principal amount, the respondent is in contravention of Article 43 (1) (e) and (f) and Article 27 of the Constitution of Kenya,” he stated.
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The trio had taken the loans to fund their undergraduate degree studies but the rate at which the loan accumulated became alarming.
Mugure, one of the beneficiaries was loaned Ksh. 82,980 in 2004 but the loan added up to Ksh. 540,464 by 2016 at the interest rate of 2%.
The loan board on the other hand is urging the loanees to repay the debts in order to allow others to benefit. The habit of the not complying with the HELB regulations makes it hard for them to provide loans to other students.
However, HEIB has recorded a significant improvement. In February, the defaulted accounts were 109,661 comparing to the current accounts standing at 94,216.
Meanwhile, the unpaid loans stand at Ksh. 10.2 billion.
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