Digital Finance Seeks to Unlock Ksh40B For Women Enterprises

A joint report by the International Finance Corporation (IFC) and the World Bank titled “Voices of Women Entrepreneurs in Kenya”, women-owned enterprises account for approximately 48% of all micro, small, and medium-sized enterprises (MSMEs) in the country. These MSMEs contribute about 20% to Kenya’s Gross Domestic Product, underscoring the critical role women play in driving economic growth.

The report further reveals that women are leading in business creation. Of the estimated 462,000 new informal-sector jobs created annually since 2000, at least 85%, about 445,000, are attributed to women-owned businesses. From market stalls and small retail shops to agribusiness ventures and service enterprises, women are at the heart of Kenya’s entrepreneurial engine.

Despite their numerical dominance and undeniable contributions, women entrepreneurs continue to face systemic barriers that limit growth and sustainability. The IFC-World Bank findings show that women-owned businesses are less likely to scale, tend to remain smaller in size, and are twice as likely to operate from home compared to those owned by men. Gaps in strategic planning, pricing, access to capital, and expansion opportunities persist, effectively capping their economic impact.

For many low-income female-led micro-entrepreneurs (FLMEs), access to appropriate financial tools remains one of the most significant hurdles. Expensive financing options, limited access to credit, and exclusion from formal digital financial services have kept thousands operating on the margins of the formal economy.

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It is this financing gap that has prompted a strategic intervention by KCB Foundation in partnership with KCB Bank Kenya and the Gates Foundation. The three institutions have launched an ambitious three-year initiative targeting 700,000 nano and micro women entrepreneurs across Kenya, intending to deepen financial inclusion and strengthen business resilience.

At the centre of this partnership is DiGiFLME, a digital financial product specifically designed for nano and micro women entrepreneurs who have historically been excluded from mainstream formal financial systems. Recognizing that most of the target beneficiaries use feature phones rather than smartphones, the solution is accessible through a simple USSD code, ensuring ready access, inclusivity, and ease of use.

DiGiFLME product is structured to unlock up to Ksh 40 billion in loans and mobilize Ksh 2 billion in savings over the three-year period. Beyond numbers, the initiative seeks to provide flexible, affordable, and accessible financial and non-financial solutions tailored to the realities of nano and micro businesses. By enabling women to borrow responsibly and build savings cushions, the product aims to enhance financial stability, support business expansion and resilience, and drive long-term economic empowerment.

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KCB Foundation Director Mendi Njonjo noted that women entrepreneurs are resourceful and resilient, but remain underserved by traditional/formal financial models. “DiGiFLME is designed to meet them where they are, providing simple, affordable, and accessible financial solutions that unlock their potential. When we empower nano and micro women in business, we are not only transforming households, but we are also strengthening Kenya’s economy,” Mendi Njojo said.

As Kenya pushes towards inclusive economic growth, closing the gender financing gap has become an economic necessity. With women already accounting for nearly half of the country’s MSMEs and generating many informal sector jobs, expanding their access to digital finance could significantly accelerate national development.