IFC, 4G Capital Team Up to Unlock $144.4 Million in MSME Financing

Fintech lender 4G Capital has partnered with the International Finance Corporation (IFC) under a new risk-sharing initiative aimed at expanding access to financing for Kenya’s micro, small and medium-sized enterprises (MSMEs), particularly women-owned businesses.

The partnership is part of IFC’s first Catalytic First Loss Guarantee (CFLG) transactions in Africa. Alongside similar agreements with Equity Bank Kenya and KCB Bank Kenya, the three partnerships are expected to unlock approximately $144.4 million in local currency lending for microenterprises, women-owned businesses and climate-focused enterprises across Kenya.

Rather than a direct investment in 4G Capital, IFC is providing a first-loss guarantee, allowing participating lenders to extend more credit by reducing the risk associated with lending to underserved businesses. The initiative is delivered through IFC’s $4 billion MSME Platform and is supported by blended finance from the International Development Association’s (IDA) Private Sector Window (PSW).

Across the three transactions, IFC has committed $24.2 million, backed by $11 million from the IDA PSW. The programme is expected to mobilize approximately $120.2 million in additional lending to MSMEs, with every dollar of first-loss capital designed to unlock about $11 in financing for small businesses.

MSMEs account for approximately 90% of businesses in Kenya and employ more than 15 million people, yet many continue to struggle to access affordable financing. IFC estimates Kenya’s MSME financing gap at nearly 21% of GDP, limiting the ability of businesses to expand operations, create jobs and invest in productivity and climate resilience.

For 4G Capital, the agreement marks its first partnership with IFC and strengthens its ability to provide working capital to entrepreneurs who have traditionally been underserved by the formal financial sector.

“Small businesses are the backbone of Kenya’s economy, creating jobs, generating income, and driving innovation in communities across the country,” said Mary Porter Peschka, IFC Division Director for Eastern Africa. “Through these partnerships, IFC is helping expand access to finance for entrepreneurs who have traditionally been underserved by the financial system. By sharing risk through the Catalytic First Loss Guarantee Program, we are unlocking capital that can help businesses grow, strengthen their resilience, and contribute to more inclusive and sustainable economic growth.”

Julian Mitchell, CEO of 4G Capital, welcomed the partnership, saying access to working capital remains the biggest obstacle facing many small businesses, particularly those owned by women.

“The biggest challenge for micro and small businesses is access to working capital, particularly for women-owned enterprises. This facility provides us with the ability to reach and impact more underserved business owners and support their growth, which is vital to their local communities,” he said.

Beyond the financing, IFC said it will continue working with participating institutions to strengthen their ability to serve MSMEs and expand sustainable financing solutions that promote innovation, financial inclusion and inclusive private sector growth.

The initiative also builds on IFC’s long-standing relationships with KCB Group and Equity Group, extending nearly two decades of collaboration aimed at strengthening Kenya’s financial sector and improving access to finance for underserved businesses.

As digital lenders continue to play an increasingly important role in Kenya’s financial ecosystem, initiatives such as the CFLG programme are expected to help narrow the country’s financing gap while enabling more entrepreneurs to invest, grow and create jobs.