Africa-Press – Kenya. United Nations Capital Development Fund (UNCDF) has picked Co-operative Bank for a shared-risk lending facility for Kenya’s digital small business economy.
The partnership covers the Digital Platforms Kenya Programme (DigiKen), which will finance youth-led and digitally enabled small businesses and platform enterprises over two years.
The $1.8 million (Sh233. 3 million) deal means Co-operative Bank can lend to a wider range of businesses without taking on undue risk.
The bank remains fully in charge of its lending decisions, and its standards remain unchanged.
What changes is the number of businesses that can now access finance through it, reaching further into Kenya’s agricultural and digital economy than it could alone.
For businesses in the country’s arid and semi-arid regions, that reach is even greater, with UNCDF’s backing stepping up for eligible DigiKen borrowers in those counties.
Co-op retail and banking director Samuel Birech yesterday said the partnership brings impact-driven lending into Kenya’s agricultural and digital sectors without sacrificing governance or credit rigour.
“This partnership is about expanding what is possible for Kenyan businesses and backing them with real capital. The businesses we are looking to support are ambitious, commercially viable and ready to grow,” he said.
The DigiKen programme addresses Kenya’s fast-growing digital economy, where many young entrepreneurs and small online businesses struggle to access formal credit despite clear commercial viability.
The partnership also supports the Cold Chain programme, which aims to reduce post-harvest losses by financing the shift to solar-powered storage for farmers and rural processors.
Access to affordable finance remains one of the biggest barriers to investments for MSMEs operating in Kenya’s digital platform economy,” said Omon Ukpoma-Olaiya, Regional Investment Team Lead (East and Southern Africa and Arab States) at the United Nations Capital UNCDF).
Through the guarantee facility, UNCDF will help reduce lending risks and unlock capital for innovative MSMEs.
“By enabling financial institutions to expand credit to underserved enterprises, this partnership supports business growth, job creation, deepens the financial sector, develop market systems and broader economic development.”
Combined with the Kenya Post-Harvest Solar Cooling project, the two programmes will support a total lending portfolio of $5.84 million (Sh756.9 million).
Both programmes align with Kenya’s national priorities on digital economic growth and climate resilience.
DigiKen’s focus on youth-led businesses speaks directly to Kenya’s ambition to become a leading digital economy on the continent, while the Cold Chain programme’s emphasis on solar technology supports the country’s broader push to reduce carbon emissions in agriculture.
The Digital Platforms Kenya (DigiKen) Programme is a multi-agency United Nations initiative that aims to strengthen Kenya’s digital platform economy by supporting innovation, entrepreneurship, and improved access to finance for MSMEs.
UNCDF mobilizes and catalyses an increase in capital flows for impactful investments in high-risk markets, especially in Least Developed Countries, Small Island Developing States and countries in special situations.
By crowding in capital through the deployment of risk-absorbing financial instruments, mechanisms and structuring advisory, UNCDF contributes to job creation and sustained economic growth in more than 70 countries.
