The International Finance Corporation (IFC) has announced a Sh2.58 billion ($20 million) risk-sharing facility for Equity Bank Kenya to support the financial inclusion of refugees and their host communities.

The World Bank's Private Sector Lending Division said the facility will strengthen financial inclusion of individuals and small businesses in Kenya's most underserved regions, including the refugee hosting areas of Turkana and Garissa.

“It is expected that the project will serve as a model for similar private sector support initiatives in other African countries hosting large refugee populations. There are an estimated 30 million internally displaced people, refugees and asylum seekers in Africa, representing almost a third of the global refugee population,” the IFC said.

As part of the financing agreement, IFC will provide 50 percent of the commitment ($10 million) under the Risk Sharing Facility, improving access to finance for businesses owned and operated by refugees in Kenya and surrounding host communities.

This initiative is the first to be supported by the Partnership to Improve Prospects for Forced Displaced Persons and Host Communities (Prospects), which is investing $4 million (Sh516.24 million) into the facility.

Prospects is a global partnership that aims to improve access to education, social protection and decent work for host communities and forcibly displaced people.

Equity Group Chief Executive Officer James Mwangi said the funding will help expand ongoing social impact programs in 14 counties across Kenya.

“The partnership will enable us to expand our ongoing social work in 14 counties, including Turkana and Garissa, where the Kakuma, Kalobeyei and Dadaab refugee camps are located. We hope this implementation represents a proof of concept that will inform the scaling of our refugee-focused initiatives across the remaining jurisdictions in East and Central Africa.”

As part of the partnership, IFC will also provide a comprehensive advisory service program to enhance Equity Bank Kenya's microcredit and non-financial services to target customers.

“This partnership with Equity Bank Kenya demonstrates how private sector resources can support vulnerable populations such as refugees and their hosts, giving them a better chance to improve their lives and communities and respond to their needs,” said Sérgio Pimenta, IFC- Vice President for Africa.

The Women Entrepreneurs Finance Initiative (WE-FI), a global, multi-partner effort to improve financing for women-led micro, small and medium enterprises launched in 2023, also supports the Facility for Equity Bank Kenya, which includes a 40 percent first loss guarantee and a performance-based incentive to promote financing of women-owned businesses.

WE-FI's founding funders include Australia, Canada, China, Denmark, Germany, Japan, the Netherlands, Norway, the Russian Federation, Saudi Arabia, the Republic of Korea, the United Arab Emirates, the United Kingdom and the United States.​