The Higher Education Loans Board (HELB) on Tuesday issued a 30-day ultimatum to more than 67,000 student loan defaulters.
The agency warned Kenyans with non-performing loans to start paying or risk negative listing with the three local Credit Reference Bureaus (CRBs).
Reports indicate that about 67,093 former university students owe HELB Ksh6.5 billion in nonperforming loans, and only 156,198 accounts valued at Ksh24.2 billion are repaying the credit.
In a statement, HELB stated that defaulters would only receive a positive listing on CRB if they were compliant or had fully repaid their loans.
Any borrower from a bank, Sacco, microfinance institution or mobile money services is a consumer of credit and the law requires that lenders provide information about all their credit customers through CRBs licensed by the Central Bank of Kenya.
A default listing is retained on CRB database for five years from the last date of payment after applying for a clearance certificate from the bureaus.
HELB beneficiaries are given up to one year after completion of studies to embark on servicing the loan failure to which it begins to accumulate a fine of Ksh 5,000 per month.
The body has previously tried different tactics to recover the money loaned to students decades after they finish their courses with the most recent being the threat to arrest defaulters when the Education Ministry was under CS Amina Mohamed. The arrest threat did not bear fruits forcing the body to resolve to blacklist the defaulters.
The lender depends on the loan money repaid by graduates to finance fresh students to go through the university with the hope that they will pay back to enable the body to finance more needy learners.
Failure of a large number of ex-students to repay the loans has seen the body result in allocation cuts which has in turn affected students coming from the needy background.
