Co-operative Bank of Kenya has today announced a landmark partnership with the United Nations Capital Development Fund (UNCDF), creating a shared-risk lending facility to channel new financing into Kenya’s digital small business economy.
The partnership covers the Digital Platforms Kenya Programme (DigiKen), which will provide financing for youth-led and digitally enabled small businesses and platform enterprises over two years. The partnership between Co-operative Bank and UNCDF will support a total lending portfolio of KES 233.1 million (USD 1.8 million).
UNCDF’s involvement means Co-operative Bank can extend credit to a wider range of businesses without taking on undue risk. The Bank remains fully in charge of its lending decisions, and its standards remain unchanged. What changes is the number of businesses that can now access finance through it, reaching further into Kenya’s digital economy than it could alone. For businesses in the country’s arid and semi-arid regions, that reach is even greater, with UNCDF’s backing stepping up for eligible DigiKen borrowers in those counties.
Vincent Marangu, Director Co-operatives Banking Division, said the partnership reflected the Bank’s commitment to bringing responsible, impact-driven lending into Kenya’s agricultural and digital sectors without sacrificing governance or credit rigour. “This partnership is about expanding what is possible for Kenyan businesses and backing them with real capital. Co-operative Bank has always believed that disciplined, responsible lending and genuine financial inclusion are not in conflict. Working with UNCDF gives us the means to prove that at scale. 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.
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The DigiKen programme addresses Kenya’s fast-growing digital economy, where many young entrepreneurs and small online businesses struggle to access formal credit despite clear commercial viability. The partnership also supports the Cold Chain programme, which aims to reduce post-harvest losses by financing the shift to solar-powered storage for farmers and rural processors.
“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. By enabling financial institutions to expand credit to underserved enterprises, this partnership supports business growth, job creation, deepens the financial sector, develops market systems and broader economic development.
The partnership will also cover the Kenya Post-Harvest Solar Cooling Programme (Cold Chain), which will finance solar-powered cold storage and post-harvest infrastructure for agri-SMEs, co-operatives and rural processors. Combined, the two programmes will support a total lending portfolio of KES 756 million (USD 5.84 million).
Both programmes align with Kenya’s national priorities on digital economic growth and climate resilience. DigiKen’s focus on youth-led businesses speaks directly to Kenya’s ambition to become a leading digital economy on the continent, while the Cold Chain programme’s emphasis on solar technology supports the country’s broader push to reduce carbon emissions in agriculture.
The launch positions Co-operative Bank as a committed partner in Kenya’s development agenda, combining the credibility of the UN partnership with the Bank’s own track record in responsible, community-rooted finance
