4G Capital and IFC Partner to Unlock Finance for Kenya’s Small Businesses

4G Capital  has entered a new partnership with IFC  under the Catalytic First Loss Guarantee (CFLG) Program, helping unlock a new pathway to finance for Kenya’s micro and small businesses, including women-owned enterprises. The partnership forms part of IFC’s first CFLG transactions in Africa, alongside Equity Bank Kenya and KCB Bank Kenya Limited. Together, the three transactions are expected to catalyze approximately $144.4 million equivalent in local currency lending to microenterprises, women-owned businesses, and climate-focused enterprises, helping drive inclusive growth and job creation across the country.

The CFLG is an innovative programme delivered under IFC’s $4 billion MSME Platform, enabling IFC to provide first-loss coverage to partner financial institutions by leveraging blended finance through the International Development Association’s Private Sector Window (IDA PSW). IFC has committed $24.2 million across the three transactions, backed by $11 million in IDA PSW financing. The transactions are expected to mobilize approximately $120.2 million in additional lending to micro, small and medium enterprises (MSMEs), achieving a target leverage ratio of 11:1, enabling each dollar of first-loss capital to support approximately $11 in financing for small businesses. MSMEs play a critical role in Kenya’s economy, accounting for approximately 90% of all businesses and providing employment to more than 15 million people. Nevertheless, with the finance gap for MSMEs estimated at nearly 21% of GDP, limited access to affordable credit remains one of the key barriers preventing small businesses from expanding operations, creating jobs, and investing in productivity-enhancing and climate-resilient initiatives.

The transaction establishes a new partnership between 4G Capital and IFC, bringing together one of Kenya’s leading fintech lenders and the world’s largest global development institution focused on the private sector in emerging markets. It reflects a shared commitment to expanding access to finance through innovative digital financial services. The wider initiative also deepens IFC’s long-standing strategic partnerships with KCB Group and Equity Group, built over nearly two decades of collaboration to strengthen Kenya’s financial sector and expand lending to underserved businesses.

“Small businesses are the backbone of Kenya’s economy, creating jobs, generating income, and driving innovation in communities across the country. Through these partnerships, IFC is helping expand access to finance for entrepreneurs who have traditionally been underserved by the financial system. By sharing risk through the Catalytic First Loss Guarantee Program, we are unlocking capital that can help businesses grow, strengthen their resilience, and contribute to more inclusive and sustainable economic growth.”

– Mary Porter Peschka, Division Director for Eastern Africa, IFC

The transaction with 4G Capital establishes a new partnership between IFC and one of Kenya’s leading fintech lenders, reflecting IFC’s commitment to expanding access to finance through innovative digital financial service providers. At the same time, the investments deepen IFC’s long-standing strategic partnerships with KCB Group and Equity Group, built over nearly two decades of collaboration to strengthen Kenya’s financial sector and expand lending to underserved businesses.

“We are delighted to receive this support from the IFC. The biggest challenge for micro and small businesses is access to working capital, particularly for women-owned enterprises. This facility provides us with the ability to reach and impact more underserved business owners and support their growth which is vital to their local communities.”

– Julian Mitchell, CEO, 4G Capital

In addition to financing, IFC will continue working closely with participating institutions to strengthen their capacity to serve MSMEs and expand access to sustainable financing solutions, supporting innovation and inclusive private sector growth across Kenya.