Co-op Bank's Award-Winning Approach to MSME Growth

The Co-operative Bank of Kenya has been named the Winner of the Product Innovation of the Year (Africa) award at the Global SME Finance Awards 2025. This prestigious recognition, hosted by the International Finance Corporation (IFC) and the SME Finance Forum, and endorsed by the G20 Global Partnership for Financial Inclusion (GPFI), highlights Co-op Bank's comprehensive strategy for empowering MSMEs through tailored products, digital ecosystems, and inclusive financing models.

The award ceremony took place at The Galleria in Johannesburg, South Africa, where Co-op Bank was lauded for its “Full-Spectrum Approach to MSME Growth.” This approach is designed to address various challenges faced by small businesses, including access to working capital, efficient payment solutions, digital access, risk management, and financial literacy.

Key Innovations and Impact

Co-op Bank's strategy extends beyond traditional lending, creating a robust digital and financial ecosystem for MSMEs. A flagship example is the MSME Stock Financing Solution, which provides revolving capital aligned with sector cycles for fast-moving consumer goods (FMCG), agro-dealers, and retailers.

The bank has also made significant strides in digital lending. In 2024, Co-op Bank disbursed $594 million (approximately KES 77 billion) in digital credit through its M-Coop Cash mobile platform. This included $109.8 million (approximately KES 14 billion) in unsecured loans based on business turnover.

Furthermore, Co-op Bank has demonstrated a strong commitment to gender inclusion through partnerships with the Africa Guarantee Fund (AGF), providing up to 75% credit guarantees for women-led MSMEs.

Structured Engagement and Risk Management

To enhance financial literacy and resilience among MSMEs, Co-op Bank offers structured engagement through MSME Clinics, webinars, and in-person forums. The bank has engaged over 235,000 MSMEs across Kenya through differentiated service models, including Bronze, Silver, and Gold customer packages.

The bank's active portfolio management and structured lending have resulted in non-performing loan (NPL) ratios that are below the sector average. This is supported by embedded monitoring tools and data-driven scoring for faster and fairer credit decisions.

Policy Implications and Future Outlook

Analysts suggest that this international recognition could significantly influence public debate and policy execution regarding MSME support in Kenya. Stakeholders are urging for greater clarity on the timelines, costs, and safeguards associated with such innovative financial products. The award validates Co-op Bank's commitment to building a supportive ecosystem for MSMEs, which are considered the engine of Kenya's economy.

Evidence and Data

• Award: Product Innovation of the Year (Africa) at the Global SME Finance Awards 2025.
• Host: International Finance Corporation (IFC) and SME Finance Forum.
• Endorsement: G20 Global Partnership for Financial Inclusion (GPFI).
• Digital Credit Disbursed (2024): $594 million (KES 77 billion) via M-Coop Cash.
• Unsecured Turnover-Based Loans (2024): $109.8 million (KES 14 billion).
• MSMEs Engaged: Over 235,000 across Kenya.
• Gender Inclusion: Partnerships with Africa Guarantee Fund (AGF) offering up to 75% credit guarantees for women-led MSMEs.

What to Watch

The banking sector and policymakers will be closely observing how Co-op Bank's award-winning model influences other financial institutions in Kenya to adopt similar innovative approaches for MSME financing. The focus will also be on how these innovations contribute to broader financial inclusion and economic growth across the country.