Factors influencing the uptake of the Hustler Fund by youth entrepreneurs in Nairobi County, Kenya

Abstract

Access to affordable credit remains a major barrier for young entrepreneurs in Nairobi County, Kenya, due to persistent unemployment and financial exclusion. Traditional financial institutions often impose stringent lending conditions, such as high interest rates and collateral requirements, which hinder youth—particularly those in the informal sector—from accessing credit. This study assessed the key factors influencing the uptake of the Hustler Fund among youth entrepreneurs in Nairobi County. It focused on four main variables: financial literacy, loan eligibility criteria, loan terms, and technological infrastructure and distribution channels. The study was grounded in the Financial Literacy Theory, Credit Rationing Theory, and the Theory of Planned Behavior. A descriptive cross-sectional survey design was adopted, and stratified random sampling was used to select 400 youth entrepreneurs aged 18–35 years. Data were collected using structured questionnaires and analyzed using SPSS version 23. Regression analysis was employed to determine the relationship between the independent variables and Hustler Fund uptake. The findings revealed that higher levels of financial literacy, more inclusive eligibility criteria, flexible loan terms, and accessible technological infrastructure significantly enhance youth uptake of the Hustler Fund. The study recommends targeted financial education programs, adjustments to eligibility conditions to better reflect informal sector dynamics, more flexible loan terms, and improved digital infrastructure. However, the study had some limitations. It was confined to Nairobi County, limiting the generalizability of the findings to other regions. Data was self-reported, making them susceptible to recall bias and social desirability bias. Additionally, the cross-sectional design provided only a snapshot in time, making it difficult to assess changes in behavior over time. The study also did not explore broader cultural, psychological, or political influences on youth borrowing behavior.