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How the Ministry of Education bungled communication on loan defaulters.

The extravagance displayed by the Kenyan government leads many citizens to believe that the country is much richer than it really is.

I have had a cursory test of this by asking many people to guess the average incomes for Nairobi dwellers and the rest of the country. Almost without fail, many estimate the average wage in Kenya at close to 100,000 per month, forgetting that less than three countries in Africa are at that level. And they support this inaccuracy by stating that the traffic congestion as witnessed in the cities and the successful banking and telephone companies as we see advertised mean that Kenyans have large incomes.

This misunderstanding about the size of the Kenyan economy was partly responsible for the uproar, last week, when the Cabinet Secretary for Education Amina Mohammed announced that Kenya's Higher Education Loans Board (HELB) would consider the use of police services in finding loan defaulters and recovering funds. The announcement was informed by the fact that there is a large number of students who received bursaries and are bound by contract to repay the loans upon completion of education. In the view of the Cabinet Secretary, the solvency of the HELB is under threat because of the defaults and delays in payments and this affects the ability of the institution to support more students because the demand for bursaries is growing.


Some of the beneficiaries of these loans took offence, stating that the Cabinet Secretary's tone was contemptuous and that both the HELB and the Ministry were trying to convert the civil matter of default into a criminal matter of law and order enforcement. These objections, both to the tone and the suggestion of criminalisation of default, were over the top.

Starting with the fact that all student beneficiaries of the loans were bound by contract to repay their loans on very modest rates, the default rates show that mere calls by the HELB for these students to honour their obligations did not work. This is unsurprising but it also shows that the HELB has not done a very good job in the past in ensuring that all beneficiaries are traced and made to comply. And while it held the moral high ground, the leadership at the HELB should have anticipated the adverse reaction because the Ministry of Education is not viewed favourably by many Kenyans, including more recent graduates of colleges.

It was also expected that many beneficiaries who have not paid would respond by claiming that they were unable to repay due to their unemployment. Here, the Cabinet Secretary missed an opportunity to demonstrate good faith by reiterating a policy for a moratorium for students who declare willingness to pay but are unemployed. The tough approach of a school headmistress lecturing the naughty kids was predictably disastrous. Noting the capacity and state of the Kenyan prison systems, any suggestion that the state is capable of finding, trying and placing 70,000 students in incarceration is laughable. That capacity does not exist and it would represent misdirection of the scarce resources available for law enforcement.


This situation was exploited shamelessly by younger parliamentarians who interceded to dissuade the HELB and the Ministry of Education from implementing the new policy. As beneficiaries of the bursaries system administered by the HELB and lawmakers, it lies ill in the mouth of parliamentarians to state that borrowers should not be placed under legal pressure to pay back funds that they owe to the state. In their endeavour to gain support of defaulting students by being spiteful towards HELB and the Cabinet Secretary, they succeeded in ensuring that defaults will look defensible. The direct effect of constraining the HELB from robust recovery is that the available resources to support higher education in Kenya will be limited. In other words, parliamentarians have unwittingly shrunk the future resources available for their constituents to gain university and technical education.


It is not possible that all the beneficiaries who were called out by the HELB are unemployed and are unable to pay. Kenya must find a way to support the important work that the HELB performs by allowing the full recovery without the hindrance that Parliament attempted to put in its place.

We should not let students who owe Sh100,000 each to get away with it because of the unpleasant tone of the Cabinet Secretary. That amount represents 10 months of work on the average for each citizen. Anyone who is lucky to benefit from the taxes paid by poorer Kenyans so the students may receive university education should pay back and be allowed no excuse not to do so.
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Publication:Daily Nation, Kenya (Nairobi, Kenya)
Geographic Code:6KENY
Date:Mar 1, 2019
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