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UoN seeks to hire debt collectors to recover Sh5 billion

The debt collector will trace former UoN students and recover the non-performing debts

University of Nairobi

The University of Nairobi is seeking debt collectors to aid in collecting Sh5 billion that includes money owed by former students in a bid to address cash flow challenges.

The debt collector's main roles will be tracing the former students and recovering the non-performing debts that have remained a concern to the institution, its partners and stakeholders.

The sought service provider will support the UoN in tracing and recovery of overdue debts and in management of the debt portfolio estimated at Sh5 billion,” said UoN in the notice calling for interested debt collecting firms to apply.

According to Auditor General Nancy Gathungu, former UoN students owed the university Sh857 million in an audit for the year ending June 2020, and this has led the university to deal with the issue as per the university regulations.

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"The law provides that the university can institute legal recovery proceedings against students with outstanding fees and also surcharge at an interest rate to be determined by the university council,” noted the Auditor General.

The auditor general also noted that due to the rise of debts, UoN will now be acting contrary to the university regulations which require it to withhold services to student debtors as opposed to what it was doing in the previous years.

"It (UoN) ought to withdraw any services, examination results, conferment of any degree, certificate, or award until all fees are settled," said Nancy Gathungu.

Towards the end of the same year, UoN owed the Kenya Revenue Authority (KRA) Ksh7.2 billion.

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The debt collectors will be hired for 3 years and will consult closely with the appointed correspondents from UoN.

A drop in the number of self-sponsored students and government funding are among the reasons why UoN is facing lack of funds which has resulted in a build-up of pending bills, a freeze on hiring and stalled infrastructure projects.

To remedy the cash flow challenges, the UoN has opted to establish a foundation to harness donations from the UoN alumni base in a bid to raise private funds

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