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Post Reply: HELB Faces Deepening Crisis as Leadership Disputes Sh12.9 Billion Shortfall

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on July 18, 2025, 12:36 pm</div><div id="pl-7058"  class="panel-layout" ><div id="pg-7058-0"  class="panel-grid panel-no-style" ><div id="pgc-7058-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-7058-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="1 1 []">The Higher Education Loans Board (HELB) is grappling with a severe financial crisis, exacerbated by conflicting statements from its top leadership, Chairperson Ekwee Ethuro and newly appointed Chief Executive Officer Geoffrey Monari. The discord centers on a Sh12.9 billion funding shortfall that threatens to disrupt higher education financing for thousands of Kenyan students.</p>
<p dir="ltr">Ethuro, a seasoned politician and former Senate Speaker reappointed as HELB Chairperson in 2023, has publicly downplayed the crisis, asserting that the organization remains financially stable. In a recent radio interview, he emphasized that HELB received Sh34.6 billion last year and has been allocated Sh41 billion for the current financial year. He described the shortfall as a routine government budgeting issue, stating that additional funds could be secured through supplementary budgets before the academic year begins. Ethuro also highlighted a 74 percent loan repayment rate, suggesting that most beneficiaries are committed to settling their debts, with some voluntarily clearing their balances.</p>
<p dir="ltr">In stark contrast, Monari, who assumed the CEO role in March 2025 after serving as the founding CEO of the Universities Fund, has painted a dire picture of HELB's financial health. Speaking to Members of Parliament, he revealed that the organization faces a Sh12.9 billion deficit, which has rendered it unable to provide loans to approximately 100,000 new students this year. Monari noted that HELB required Sh48 billion in the last financial year but received only Sh26 billion, severely impacting universities and Technical and Vocational Education and Training (TVET) institutions. He warned that the funding gap could destabilize the higher education sector, which narrowly avoided student protests due to the shortfall.</p>
<p dir="ltr">The disagreement between Ethuro and Monari has sparked confusion among stakeholders, raising questions about the true state of HELB's finances and its ability to fulfill its mandate of providing affordable loans, bursaries, and scholarships to Kenyan students, particularly those from low-income families. The organization, established to support access to higher education, is now at a critical juncture as loan applications have surged by 24.5 percent to over 1 million in the 2024-2025 period, according to recent economic data.</p>
<p dir="ltr">Monari has also drawn attention to the issue of loan defaults, which further complicates HELB's financial challenges. He disclosed that over 316,000 former students owe Sh35 billion, with 71,806 defaulters blacklisted by credit reference bureaus, limiting their access to financial services. To address this, Monari is pushing for legal reforms to grant HELB authority to freeze bank accounts of defaulters, particularly those with stable incomes. He cited partnerships with agencies like the Kenya Revenue Authority (KRA) and the National Transport and Safety Authority (NTSA) to track non-compliant borrowers, some of whom have purchased assets like cars while evading loan repayments. Additionally, HELB is exploring collaborations with embassies and the State Department of Immigration to locate defaulters abroad.</p>
<p dir="ltr">Ethuro, however, remains optimistic, arguing that the repayment challenges are manageable and that HELB's recovery strategies are effective. He pointed out that 463,150 individuals are actively servicing loans worth Sh66.26 billion, indicating a functional repayment system despite the defaults.</p>
<p dir="ltr">The leadership clash comes at a turbulent time for HELB, following the High Court's December 2024 ruling that declared the new university funding model unconstitutional. Introduced in 2023, the model shifted from direct institutional support to a student-centered approach but faced criticism for its implementation. Monari, with his extensive experience in higher education financing, is tasked with navigating these challenges while spearheading institutional restructuring and fintech optimization.</p>
<p dir="ltr">The funding crisis has already had tangible impacts. In the 2024-2025 financial year, HELB's budget was cut by Sh710 million, and the Universities Fund faced a Sh2.6 billion reduction, leaving over 300,000 students without loans. Additionally, students at institutions like the Kenya Medical Training College (KMTC) have been excluded from HELB funding due to budget constraints, despite a Sh500 million reinstatement for some programs.</p>
<p dir="ltr">As the academic year approaches, the public dispute between Ethuro and Monari risks eroding confidence in HELB's ability to support Kenya's growing student population. Lawmakers have criticized the organization's reliance on Treasury allocations and questioned its strategies for tracking defaulters. With over 1 million loan applications and a ballooning default rate, the need for a unified approach to address the Sh12.9 billion shortfall is urgent. The coming months will be critical for HELB as it seeks to restore stability and ensure that higher education remains accessible to all eligible Kenyans.</p>
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