IFC Supports Expansion of Financing for Kenya’s Small Businesses through the First Catalytic First Loss Guarantee Transactions in Africa

Nairobi, Kenya, August 4, 2026 – IFC has committed its first transactions in Africa under the Catalytic First Loss Guarantee (CFLG) Program, unlocking a new pathway to finance for Kenya's entrepreneurs. Through partnerships with 4G Capital, Equity Bank Kenya, and KCB Bank Kenya Limited, the initiative is expected to catalyze approximately $144.4 million equivalent in local currency lending to microenterprises, women-owned businesses, and climate-focused enterprises, helping drive inclusive growth and job creation across the country.

The CFLG is an innovative program delivered under IFC's $4 billion MSME Platform, enabling IFC to provide first-loss coverage to partner financial institutions by leveraging blended finance through the International Development Association's Private Sector Window (IDA PSW). IFC has committed $24.2 million across the three transactions, backed by $11 million in IDA PSW financing. The transactions are expected to mobilize approximately $120.2 million in additional lending to micro, small and medium enterprises (MSMEs), achieving a target leverage ratio of 11:1, enabling each dollar of first-loss capital to support approximately $11 in financing for small businesses.

MSMEs play a critical role in Kenya's economy, accounting for approximately 90% of all businesses and providing employment to more than 15 million people. Nevertheless, with the finance gap for MSMEs estimated at nearly 21% of GDP, limited access to affordable credit remains one of the key barriers preventing small businesses from expanding operations, creating jobs, and investing in productivity-enhancing and climate-resilient initiatives.

“Small businesses are the backbone of Kenya’s economy, creating jobs, generating income, and driving innovation in communities across the country. Through these partnerships, IFC is helping expand access to finance for entrepreneurs who have traditionally been underserved by the financial system. By sharing risk through the Catalytic First Loss Guarantee Program, we are unlocking capital that can help businesses grow, strengthen their resilience, and contribute to more inclusive and sustainable economic growth,” said Mary Porter Peschka, IFC Division Director for Eastern Africa.

The transaction with 4G Capital establishes a new partnership between IFC and one of Kenya's leading fintech lenders, reflecting IFC's commitment to expanding access to finance through innovative digital financial service providers. At the same time, the investments deepen IFC's long-standing strategic partnerships with KCB Group and Equity Group, built over nearly two decades of collaboration to strengthen Kenya's financial sector and expand lending to underserved businesses.

“We are delighted to receive this support from the IFC. The biggest challenge for micro and small businesses is access to working capital – particularly for women-owned enterprises. This facility provides us with the ability to go further and faster – beyond the $1.2Bn disbursed and 1.4M jobs we have helped create to date.  We can reach and impact more underserved business owners and support their growth which is vital to their local communities and to Kenya and the region,” said Julian Mitchell, Chief Executive Officer, 4G Capital.

“This partnership with IFC goes to the heart of Equity Bank (Kenya) Limited’s purpose - transforming lives by giving Kenyans the tools to grow. It accelerates our Africa Recovery and Resilience Plan, through which we have committed $6 billion to finance 5 million businesses and 25 million individuals, catalyzing up to 50 million jobs across the region. The Catalytic First Loss Guarantee allows us to reach entrepreneurs long excluded from formal credit - especially women, youth, and micro‑business owners - on terms that work for them. By de-risking lending at this level, we are unlocking jobs, building resilience, and driving inclusive growth. We are proud to pioneer this program with IFC in Kenya and beyond,” said Moses Nyabanda, Managing Director, Equity Bank (Kenya) Limited.

"Our partnership with IFC reinforces our commitment to expanding access to affordable credit for businesses that have traditionally faced financing constraints, particularly women-led enterprises and climate-focused businesses. By leveraging this innovative risk-sharing mechanism, we will extend more capital to entrepreneurs, enabling them to scale their businesses and contribute to Kenya's sustainable economic transformation," said Mrs. Annastacia Kimtai, KCB Bank Kenya Managing Director.

In addition to financing, IFC will continue working closely with participating institutions to strengthen their capacity to serve MSMEs and expand access to sustainable financing solutions, supporting innovation and inclusive private sector growth across Kenya.

Find more information about the Catalytic First Loss Gaurantee here.