NAIROBI, Kenya, Mar 18 – Kenya’s youth-led digital platforms are set for a financing boost following a new partnership between Co-operative Bank of Kenya and the United Nations Capital Development Fund (UNCDF).
According to the partners, the move is aimed at unlocking credit for small, tech-enabled enterprises often locked out of formal lending.
The deal establishes a shared-risk lending facility under the Digital Platforms Kenya Programme (DigiKen), with an initial Sh233.1 million ($1.8 million) earmarked for youth-driven and digitally enabled small businesses over the next two years.
The move targets a critical gap in Kenya’s fast-growing digital economy, where e-commerce ventures, platform-based services and online SMEs many run by young entrepreneurs struggle to access affordable credit despite demonstrating viable business models.
UNCDF’s risk-sharing role allows Co-operative Bank to extend loans to a broader pool of borrowers without loosening its credit standards, effectively increasing the number of digital enterprises that can access formal financing.
The structure is expected to be particularly impactful in arid and semi-arid regions, where access to finance remains limited.
“The businesses we are looking to support are ambitious, commercially viable and ready to grow. They are looking for a bank that takes them seriously, and that is exactly what this partnership enables us to be,” said Vincent Marangu, Director Co-operatives Banking Division, Co-operative Bank of Kenya.
The DigiKen programme reflects a broader shift in Kenya’s financial sector towards recognizing digital platforms as bankable enterprises, particularly as youth-led startups increasingly drive innovation in commerce, logistics and services.
“Access to affordable finance remains one of the biggest barriers to investments for MSMEs operating in Kenya’s digital platform economy,” said Omon Ukpoma-Olaiya, Regional Investment Team Lead (East & Southern Africa & Arab States) at the United Nations Capital Development Fund (UNCDF).
“Through this guarantee facility with Co-operative Bank of Kenya, UNCDF will help reduce lending risks and unlock capital for innovative MSMEs.”
Beyond digital platforms, the partnership also integrates a climate-linked financing component through the Kenya Post-Harvest Solar Cooling Programme.
This will fund solar-powered cold storage and post-harvest infrastructure for agri-SMEs and rural enterprises many of which are increasingly integrating digital tools into their operations.
Combined, the two programmes are expected to support a total lending portfolio of Sh756 million ($5.84 million), aligning with Kenya’s dual push for digital transformation and climate resilience.
