Co-op Bank, UNCDF Partner to Boost Lending to Young Businesses

Co-operative Bank of Kenya and the United Nations Capital Development Fund (UNCDF) have joined forces to improve access to loans for young entrepreneurs, especially those running digital businesses. The two institutions have launched a KES 233.1 million ($1.8 million) risk-sharing facility, which will allow the bank to lend more money while sharing part of the risk with UNCDF.

Under the partnership, UNCDF will absorb a portion of possible loan losses, making it easier for Co-op Bank to support businesses that may not meet strict lending conditions but still show strong potential. The programme will run for two years and is part of the Digital Platforms Kenya Programme, targeting youth-led businesses that operate online or use digital tools.

Through this collaboration, the bank is expected to increase lending to micro, small, and medium-sized enterprises, many of which have struggled to access formal financing despite growing demand in the digital economy. The partnership also goes beyond digital businesses to include support for agriculture, with a focus on financing solar-powered cold storage systems. This will help reduce post-harvest losses and improve incomes for farmers.

Together, Co-op Bank and UNCDF expect the initiative to unlock a total lending portfolio of about KES 756 million ($5.84 million), expanding credit access to more businesses across the country. The collaboration highlights a shared goal of supporting business growth, creating jobs, and strengthening financial inclusion by making it easier for young entrepreneurs to access funding.