LONDON, United Kingdom — Kenya hosts one of the largest refugee populations in Africa, with more than 750,000 refugees and asylum seekers living primarily in Kakuma and Dadaab refugee camps. While humanitarian assistance meets immediate needs, limited access to financial services has long restricted refugees’ ability to achieve economic self-reliance. In response, Equity Bank has partnered with the International Finance Corporation (IFC) to launch a $20 million risk-sharing facility designed to expand access to credit for refugee and host-community entrepreneurs in Kenya.
Announced in late 2024, the initiative represents a shift from aid-based support toward market-driven solutions that address poverty through financial inclusion. By reducing lending risk, the facility enables refugees and marginalized communities to access loans, grow businesses and generate income.
Expanding Credit Access in Marginalized Regions
The fund targets refugees and host communities in 14 underserved Kenyan counties, including Turkana and Garissa, where formal banking penetration remains low. Under the agreement, IFC assumes 50% of the credit risk on a portfolio of eligible loans. This allows Equity Bank to extend financing to borrowers who would otherwise fail to meet traditional collateral requirements.
This model addresses one of the most significant barriers refugees face: exclusion from formal financial systems. According to IFC, many refugees operate informal microenterprises but lack the documentation or assets required to access credit. By sharing risk, the facility enables Equity Bank to assess borrowers based on cash flow and business viability rather than solely on collateral.
Supporting Refugee Entrepreneurs and Livelihoods in Kenya
The facility supports loans to micro, small and medium-sized enterprises operating in sectors such as agriculture, trade, manufacturing and services. These businesses play a crucial role in refugee-hosting regions, where employment opportunities remain scarce and poverty rates are high.
In Turkana County, home to the Kakuma refugee camp, unemployment and underemployment affect both refugees and host communities. Equity Bank’s program aims to promote economic integration by financing enterprises that create local jobs and stimulate demand for goods and services. Beyond lending, the initiative also provides nonfinancial support, including financial literacy training, entrepreneurship mentoring and agribusiness capacity building.
These services are delivered through Equity Group Foundation and local partners, helping borrowers manage credit responsibly and improve long-term business sustainability.
Reducing Poverty Through Financial Inclusion
Access to credit remains a key driver of poverty reduction. According to the World Bank, financial inclusion enables households to smooth consumption, invest in education and health and build resilience to economic shocks. For refugees, who often rely on informal labor and aid transfers, access to formal finance can mark the transition from dependency to self-reliance.
Kenya’s refugee-hosting regions face particularly acute poverty challenges. Turkana County consistently records a poverty rate above 70%, driven by climate vulnerability, limited infrastructure and weak labor markets. By enabling refugees and host-community members to start or expand businesses, the risk-sharing facility directly targets income generation in these high-poverty areas.
A Scalable Model for Fragile Contexts
The Equity-IFC partnership represents one of the first large-scale risk-sharing facilities globally dedicated to refugee finance. IFC officials have highlighted the program’s potential to serve as a blueprint for other fragile and conflict-affected settings, where perceived lending risks often deter private investment.
Equity Bank’s broader Africa Recovery and Resilience Plan aims to support five million businesses and create 25 million jobs by 2030. Integrating refugees into this strategy reflects growing recognition that displaced populations can contribute meaningfully to local economies when given access to capital and skills.
Conclusion
Equity Bank’s risk-sharing facility demonstrates how innovative finance can reduce poverty by expanding opportunity rather than dependency. By lowering lending risk and pairing credit with business support, the initiative enables refugee and host-community entrepreneurs to generate income, create jobs and strengthen local economies.
As humanitarian needs continue to rise globally, programs that combine financial inclusion with economic integration offer a sustainable path forward. In Kenya, the Equity-IFC partnership shows that when refugee entrepreneurs gain access to capital and markets, they become active contributors to development rather than long-term recipients of aid.
– Sean Leung
Sean is based in London, UK and focuses on Good News for The Borgen Project.
Photo: Flickr