Equity Bank Kenya, in collaboration with the International Finance Corporation (IFC), has launched a $20 million Risk Sharing Facility (RSF) aimed at expanding financial inclusion for refugees and host communities in Kenya. The initiative, which was introduced in Kakuma, Turkana County, will be extended to 14 marginalized counties, including Turkana and Garissa—home to the Kakuma and Dadaab refugee camps.
A First-of-Its-Kind Initiative
The RSF marks the world’s first risk-sharing facility specifically designed to promote financial inclusion for refugees and their host communities. The initiative, by reducing lending risks for financial institutions, will enable Equity Bank to offer loans without requiring traditional collateral. This approach prioritizes borrowers’ character and repayment capacity, rather than conventional security-based lending.
Transforming Lives Through Financial Inclusion
Equity Bank Kenya Managing Director Moses Nyabanda, speaking on behalf of Equity Group Managing Director and CEO Dr. James Mwangi, emphasized the significance of this partnership in driving economic growth and resilience across Africa.
“This partnership with IFC embodies Equity’s commitment to driving financial inclusion and economic empowerment across the African continent. The RSF program is a crucial component of our Africa Recovery and Resilience Plan (ARRP) as it addresses the financial needs of vulnerable populations, fosters entrepreneurship, and creates jobs. By expanding access to credit and other financial services, we are investing in the future of refugees and host communities-unlocking opportunities to transform lives, restore dignity, and promote wealth creation.” Nyabanda stated.
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IFC’s Regional Director for Eastern Africa, Mary Porter Peschka, hailed the initiative as a groundbreaking step in private sector-led development within refugee-hosting areas.
“This groundbreaking initiative directly supports IFC’s mission to enhance private sector development in challenging environments. By unlocking the entrepreneurial potential of refugees and host communities, the RSF is creating jobs, providing essential services, and driving regional development.” Peschka noted.
The RSF program will strengthen Equity Bank’s microlending strategy, ensuring that refugees and host communities have access to financial resources without stringent collateral requirements. The initiative, which will be rolled out across 28 Equity Bank branches in 14 counties, will also provide financial literacy training and agribusiness capacity-building programs through the Equity Group Foundation.
Broader Economic and Social Benefits
Beyond providing access to credit, the initiative is expected to have far-reaching economic and social impacts:
1. Economic Development:
The RSF is poised to serve as a model for similar initiatives across Africa, demonstrating how financial services can be extended to displaced and marginalized communities. The program will drive economic growth in historically neglected regions by supporting entrepreneurship and job creation.
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2. Empowerment and Social Impact:
In addition to financial services, the initiative aligns with Equity Bank’s broader mission to transform lives. It will support programs in education, healthcare, and environmental sustainability, further strengthening social cohesion in refugee-hosting regions.
3. Attracting Further Investment:
The success of this initiative could attract additional investments from private sector players interested in engaging with financially excluded populations. This could create a multiplier effect, spurring economic activity and development across the targeted regions.
4. Advisory and Capacity Building:
As part of the program, IFC will provide advisory services to improve Equity Bank’s microlending capabilities. This will include targeted strategies to enhance lending to women-led businesses under the Women Entrepreneurs Finance Initiative (WE-FI), further promoting gender-inclusive economic growth.