The International Finance Corporation (IFC) has announced a Sh2.58 billion ($20 million) risk-sharing facility for Equity Bank Kenya to support financial inclusion for refugees and their host communities.
The World Bank’s private sector lending arm said the facility will boost financial inclusion for individuals and small businesses in Kenya’s most underserved regions, including the Turkana and Garissa refugee hosting areas.
“The project is expected to serve as a model for similar private sector support initiatives in other African countries hosting large refugee populations. In Africa, there are an estimated 30 million internally displaced persons, refugees, and asylum-seekers representing almost one-third of the world’s refugee population” the IFC said.
Under the funding arrangement, the IFC is taking on 50 percent of the exposure ($10 million) in the risk-sharing facility, which it said will increase access to finance for businesses owned and run by refugees in Kenya and the surrounding host communities.
This initiative is the first to be supported by the Partnership for Improving Prospects for Forcibly Displaced Persons and Host Communities (Prospects), which is investing $4 million (Sh516.24 million) in the facility.
Prospects is a global partnership that aims to improve access to education, social protection, and decent work for host communities and forcibly displaced people.
Equity Group Chief Executive Officer James Mwangi said the funding would help scale up ongoing social impact programmes in 14 counties across Kenya.
“The partnership will enable us to scale our ongoing social impact work in 14 counties, among them Turkana and Garissa, which host the Kakuma, Kalobeyei and Dadaab refugee camps. We hope that this execution displays a proof of concept that will inform the scaling of our refugee-focused initiatives in the rest of our jurisdictions across East and Central Africa.”
As part of the partnership, IFC will also provide a comprehensive advisory services programme to improve Equity Bank Kenya’s micro-lending and non-financial services for target customers.
“This partnership with Equity Bank Kenya highlights how private sector resources can support vulnerable populations, like refugees and their hosts, giving them a better opportunity to improve their lives and communities, and address their needs,” said Sérgio Pimenta, IFC’s Vice President for Africa.
The Women Entrepreneurs Finance Initiative (WE-FI), a multi-partner global commitment to improve funding for women-led micro, small, and medium enterprises, launched in 2023, is also supporting the facility for Equity Bank Kenya, which includes a 40 percent first loss guarantee and a performance-based incentive to promote financing for women-led businesses.
The founding financial contributors of WE-FI include Australia, Canada, China, Denmark, Germany, Japan, the Netherlands, Norway, the Russian Federation, Saudi Arabia, the Republic of Korea, the United Arab Emirates, the United Kingdom and the United States.
