Co-op Bank secures Sh233M boost for Kenya's digital enterprises
Enterprise
By
Brian Ngugi
| Mar 18, 2026
Co-op Bank and UNCDF join forces to support Kenya's youth-led digital businesses. [File Courtesy]
Co-operative Bank of Kenya has signed a risk-sharing agreement with the United Nations Capital Development Fund (UNCDF) to unlock Sh233.1 million in lending for youth-led and digitally enabled small businesses, the lender said on Wednesday.
The two-year guarantee facility under the Digital Platforms Kenya Programme (DigiKen) allows Co-op Bank to extend credit to a wider range of borrowers, including those in Kenya’s arid and semi-arid regions, without taking on additional risk. The bank retains full control over lending decisions and credit standards.
“This partnership is about expanding what is possible for Kenyan businesses and backing them with real capital,” said Co-operative Bank Director of Retail and Business Banking Samuel Birech. “The businesses we are looking to support are ambitious, commercially viable and ready to grow.”
The DigiKen programme targets young entrepreneurs and online businesses that struggle to access formal credit despite clear commercial viability.
The initiative is implemented by a UN consortium including UNESCO, UNCDF, UNEP and UN Women.
A separate component of the partnership will finance solar-powered cold storage and post-harvest infrastructure for agricultural SMEs, cooperatives and rural processors under the Kenya Post-Harvest Solar Cooling Programme. Combined, the two programmes support a total lending portfolio of Sh756 million.
“Access to affordable finance remains one of the biggest barriers to investments for MSMEs operating in Kenya’s digital platform economy,” said the Regional Investment Team Lead at UNCDF Omon Ukpoma-Olaiya.
“Through this guarantee facility, UNCDF will help reduce lending risks and unlock capital for innovative MSMEs.”
Co-op Bank said both programmes align with Kenya’s national priorities on digital economic growth and climate resilience. The cold chain initiative supports efforts to reduce carbon emissions in agriculture while cutting post-harvest losses.
UNCDF mobilises capital for high-risk markets, using risk-absorbing financial instruments to crowd in private investment in least developed countries and small island developing states.