Co-op Bank, UN launch $900,000 facility to finance Kenya’s digital businesses

By Maurice Momanyi

Co-operative Bank of Kenya and the United Nations Capital Development Fund (UNCDF) have launched a USD900,000 financing facility to expand access to capital for digital enterprises and digitally enabled MSMEs in Kenya.
The facility, unveiled under the Digital Platforms Kenya (DigiKen) Programme, will enable Co-op Bank to lend to technology-driven businesses that may struggle to qualify for conventional commercial loans because of limited collateral, short operating histories or evolving business models.
UNCDF will guarantee 50 to 70 per cent of qualifying loans, with businesses operating in Kenya’s Arid and Semi-Arid Lands (ASALs) eligible for coverage of up to 70 per cent.
The initiative targets 150 Kenyan MSMEs and is projected to generate 4,500 direct jobs and 20,000 indirect jobs in the digital economy.
The financing will support working capital, business expansion and technology investments, particularly in fintech, digital credit, e-commerce, digitally enabled MSMEs and digital innovation hubs.
Principal Secretary for ICT and the Digital Economy Eng. John Tanui said access to capital was essential for Kenya’s digital transformation.
“A thriving digital economy depends not only on innovation, but also on access to capital,”
Tanui said the initiative would help entrepreneurs and MSMEs, particularly women- and youth-led businesses, convert ideas into enterprises and accelerate growth in the technology sector.
Co-operative Bank Group Managing Director and CEO Dr. Gideon Muriuki said the partnership would provide practical financing solutions to businesses seeking to invest and expand.
“Many entrepreneurs still struggle to access the financing needed to turn ambition into growth,”
Muriuki said the facility would help innovative businesses invest, expand and create jobs while strengthening Kenya’s competitiveness in the digital economy.
UNCDF Regional Investment Team Lead Omon Ukpoma-Olaiya said the guarantee would give the bank greater confidence to finance businesses that do not fit traditional lending models.
United Nations Resident Coordinator in Kenya Dr. Garry Conille said the programme seeks to widen participation in the digital economy by bringing financing opportunities closer to young people, women and entrepreneurs in underserved communities.
The DigiKen programme is funded by the European Union through the Joint SDG Fund and implemented by UNESCO, UNCDF, UN Women and UNEP in partnership with the Ministry of Information, Communications and the Digital Economy.
The partners plan to roll out targeted outreach and capacity-building campaigns through regional digital innovation hubs to increase awareness and uptake of the financing solutions.