Equity Bank Kenya and International Finance Corporation (IFC) are jointly providing marginalised groups in Kenya with a $20 million (about Sh2.58 billion) Risk Sharing Facility (RSF) to enhance financial inclusion.
This is the first global risk-sharing facility dedicated to financial inclusion for refugees and their host communities. It will be implemented in 14 marginalized counties across Kenya, among them Turkana and Garissa which host Kakuma and Dadaab refugee camps, with the goal of supporting refugees and their host communities towards social economic empowerment that ultimately lead to self-reliance.
“The Risk Sharing Facility (RSF) program is a crucial component of our Africa Recovery and Resilience Plan (ARRP), as it directly addresses the financial needs of vulnerable populations and fosters entrepreneurship, ultimately creating jobs and building more resilient communities,” Equity Bank Kenya Managing Director, Moses Nyabanda commenting on behalf of the lender’s Director and CEO Dr. James Mwangi said on February 5, in Kakuma, Turkana County when the initiative was unveiled.
Mr Nyabanda added: “By expanding access to credit and other financial services, we are investing in the future of refugees and host communities unlocking opportunities to transform their lives, give dignity and expand opportunities for wealth creation.”
The program will enhance Equity Bank’s unsecured microlending proposition, focusing on character and capacity to pay rather than collateral. It will initially cover 14 counties with 28 branches, providing access to financial services for marginalized communities. Non-financial services, such as financial literacy training and agribusiness capacity building, will also be offered through a partnership with the Equity Group Foundation.
“This facility is helping to unlock the entrepreneurial potential of refugees and their host communities, creating jobs, providing services, and driving development in the region,” Mary Porter Peschka, IFC’s Regional Director for Eastern Africa, said.
With a significant portion of micro, small, and medium enterprises (MSMEs) in Kenya lacking access to vital financial services – studies show unmet demand for finance as high as 83 per cent – this initiative has the potential to unlock substantial economic growth. The program aligns with ARRP’s goal of creating 5 million businesses and 25 million jobs by 2030.
Given that only 56 per cent of Kenyan MSMEs are formally registered, and a further 73 per cent of those registered reported being underserved in previous studies, the RSF program has significant potential to expand financial inclusion and drive economic development.
Turkana County Governor, Jeremiah Lomorukai Napotikan, said: “The success of initiatives like the RSF reminds me that true impact is only possible through collaboration. No single entity can drive the level of change needed to transform livelihoods.”
He added that it is through partnerships that “we can develop sustainable solutions to the challenges we face” and that RSF exemplifies the spirit of collaboration.
“By assuming 50 per cent of the risk exposure, the IFC has reaffirmed its commitment to innovative financial solutions that prioritize the most vulnerable. This shared-risk approach empowers Equity Bank and other financial institutions to extend credit to businesses that might otherwise be excluded from the financial system,” said Napotikan.
