IFC today announced a risk sharing facility for Equity Bank of Kenya that is the first globally to be dedicated to financial inclusion for refugees and their host communities.
The $20 million facility will boost financial inclusion for individuals and small businesses in Kenya’s most underserved regions, including the Turkana and Garissa refugee hosting areas, home to hundreds of thousands of forcibly displaced people from countries across Africa.
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.
IFC is taking on 50 percent of the exposure ($10 million) in the risk sharing facility, which will increase access to finance for businesses owned and run by refugees in Kenya and those in 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 in the facility. PROSPECTS is a global partnership that aims to improve the access of host communities and forcibly displaced people to education, social protection, and decent work.
‘’Our collaboration with IFC towards supporting forcibly displaced persons, their hosting communities and persons residing in Arid and Semi-Arid lands, aligns with the Equity Purpose around transforming lives, giving dignity and expanding opportunities for wealth creation. It further aligns with the principle of leaving no one behind which has guided our ambition in fostering socio-economic transformation for marginalized and vulnerable populations across the years,” said Dr. James Mwangi, CEO of Equity Group. “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 scaling of our refugee focused initiatives in the rest of our jurisdictions across East and Central Africa.”
“This partnership with Equity Bank of 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.
IFC will also provide a comprehensive advisory services program to enhance Equity Bank of Kenya’s microlending and non-financial services for target customers.
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 of Kenya, which includes a 40 percent first loss guarantee and a performance-based incentive to promote financing for women-led businesses.
