The Higher Education Loans Board (HELB) plans to partner with the Kenya Revenue Authority (KRA) as it steps up efforts to recover unpaid loans from people in the informal sector.
Speaking during a KTN interview on July 8, HELB chairperson Ekwee Ethuro said the informal sector has remained a persistent challenge for the agency. He explained that, unlike formal workers whose loan repayments get deducted automatically, informal earners often fall outside HELB’s recovery systems.
“That’s why we are exploring the partnerships, and the KRA partnership is a very viable one,” stated Ethuro.
He added, “They have better systems, greater outreach, and if you buy something, KRA will be knocking on your door.”
Ethuro said more than 380,000 beneficiaries have defaulted on their loans, including over 124,000 who he described as “chronic defaulters.” He added that this group includes more than 83,000 people who have not made payments for over a decade. Those borrowers, he said, have now been blacklisted with the Credit Reference Bureau (CRB), a move that bars them from accessing banking services. Ethuro linked the situation largely to rising youth unemployment.
He said this is where KRA can play a key role, noting that the tax authority relies on data-led enforcement rather than traditional audits. Through automated data-matching tools and digital integrations, KRA can identify hidden turnover and track traders who evade taxes using mobile money and till records. Ethuro added that this approach helps target churned accounts and supports lifestyle and asset checks.
According to Ethuro, KRA’s wider reach gives it access to financial footprints that HELB cannot easily obtain on its own. He explained that if a borrower makes a significant purchase, KRA’s systems will likely detect it.
At the same time, HELB insists the initiative will not rely on intimidation or threats of jail for defaulters. Instead, the board wants the process to create a fair exchange between HELB and the people it previously supported.
HELB’s shift in focus follows its partnership with KRA to enforce mandatory salary deductions in the formal sector. Under the arrangement, employers submit staff details, begin deducting loan repayments from defaulters’ salaries, and remit the funds by the 15th of every month.
In March 2026, HELB escalated its enforcement by penalizing employers that did not comply. Organizations that failed to declare employees with outstanding loans or did not forward the required deductions now face a fine of Ksh3,000 per employee each month. The fines also run back to the worker’s date of employment.
Even so, Ethuro said the defaulters still owe a combined outstanding loan portfolio of Ksh20 billion. He added that the board has recorded progress in collections since implementing the measures, including bringing in fintech technology and improving coordination with employers.
