Kenya’s new youth empowerment scheme, NYOTA, is off to a rocky start. The government has announced that around nine million Kenyans who defaulted on Hustler Fund loans will be ineligible for the NYOTA grants. The move has sparked sharp debate over accountability, fairness, and the future of financial inclusion.
A hard threshold
Government officials have made the exclusion clear in recent public engagements. Those who failed to repay their Hustler Fund loans will not qualify for NYOTA funding. The directive links loan repayment discipline to future access to government-backed financial programmes.
The decision means that failing to clear a small debt could now cost one access to larger, long-term opportunities.
What is NYOTA?
NYOTA—short for National Youth Opportunities Towards Advancement—is a five-year partnership between the Government of Kenya and the World Bank. The programme is designed to help vulnerable young people aged between 18 and 29, or up to 35 for persons with disabilities.
It aims to boost employment and entrepreneurship by providing training, job placements, and access to small business grants. Beneficiaries will also be enrolled in savings schemes such as the National Social Security Fund’s Haba Haba product.
Each selected youth-led enterprise will receive KSh 50,000, disbursed in two tranches of KSh 25,000. The state plans to support 70 youth per ward across all 1,450 wards, targeting over 110,000 small enterprises nationwide.
The Hustler Fund challenge
The Hustler Fund, launched in November 2022, was the government’s flagship credit initiative aimed at providing affordable digital loans to individuals and small businesses. Its goal was to offer a fair alternative to high-interest mobile loans that often trapped low-income earners in endless debt.
However, repayment has been a major challenge. Government records indicate that nearly nine million people have defaulted, with non-performing loans estimated at around KSh 5 billion.
Officials have argued that defaulters have effectively blocked others from accessing funds. They insist that only financially disciplined applicants should qualify for future credit or grants.
The fairness debate
Critics of the move say the blanket exclusion is unfair and risks punishing people who defaulted due to genuine hardship. Many small traders borrowed during tough economic times and struggled to repay as costs soared and incomes fell.
“You cannot treat all defaulters the same,” said one financial analyst. “Some were affected by inflation and job losses. They didn’t choose to default.”
Youth leaders have also expressed concern that the exclusion could further marginalise young people, especially in rural areas where access to credit is already limited. They warn that the policy might deepen inequality rather than solve it.
Balancing accountability and inclusion
Supporters of the decision argue that it promotes responsibility and protects taxpayers’ money. They believe strict measures are needed to restore confidence in public credit schemes and prevent abuse.
“The government wants a culture of repayment,” said one senior official. “If you borrow, you must pay back so others can benefit.”
Still, there are growing calls for a more flexible approach. Some suggest the government introduce debt restructuring or partial repayment plans to help defaulters requalify for NYOTA. Others propose a sliding penalty system rather than a complete ban.
The NYOTA project has ambitious goals—creating jobs, nurturing savings habits, and supporting youth-led enterprises. But its success may depend on how the government balances enforcement with empathy.
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