Co-operative Bank, UNCDF Launch $1.8M Kenya Digital Lending Guarantee

Co-operative Bank of Kenya and the United Nations Capital Development Fund have launched a KES 233.1 million ($1.8 million) risk-sharing facility to expand lending to youth-led digital businesses, the partners said.

The scheme, under the Digital Platforms Kenya Programme (DigiKen), will enable the bank to extend credit to small enterprises in Kenya’s digital economy that often struggle to access formal financing.

UNCDF will absorb part of the credit risk, allowing the lender to increase its exposure without loosening its underwriting standards or ceding control over lending decisions.

The two-year programme will target digitally enabled micro, small and medium-sized enterprises (MSMEs), with a focus on commercially viable ventures led by young entrepreneurs.

The partnership also includes support for solar-powered cold storage financing for agri-businesses under Kenya’s post-harvest cooling initiative, aimed at reducing losses in the agricultural value chain.

Combined, the digital and agricultural programmes are expected to support a lending portfolio of KES 756 million ($5.84 million).

UNCDF said the facility is intended to unlock capital for underserved enterprises, supporting business expansion, job creation and financial sector development in East Africa’s largest economy.