The Higher Education Loans Board (Helb) has been barred from imposing interests, penalties or fines that exceed the principal amount given to beneficiaries.
The High Court in Nairobi termed the interests, penalties and fines imposed by Helb unconstitutional.
Three beneficiaries of the Helb loans moved to court to challenge the agency’s decision to impose the interest and penalties on their non-performing loans.
High Court Judge, Justice Alfred Mabeya ruled in favour of them
The petitioners included Ann Mugure, Davis Nguthu and Wangui Wachira
They argued that the interest rates and penalties were exorbitant and contravened their socioeconomic rights as enshrined in the Constitution.
“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,” said Justice Mabeya in the judgement.
The petitioners noted that Helb threatened to publish the names and photos of defaulters in leading newspapers of defaulters and issued a 30 day repayment notice.
Ms Mugure who is a youth living with disability borrowed Sh82,980 in July 2004 at an interest rate of 2 percent and by July, 2016, the debt had accumulated to Sh540,464.
Mr Nguthu borrowed Sh 146,090 in July 2016 and by March 2021 it had shot up to Sh335,207
Ms Wachira borrowed Sh135,000 in July 2016 and by February 2021 she was required to pay Sh336,573 .
Also Read:TVET Principals On The Process Of Prior Learning Recognition
