Beyond loans: What the Women Entrepreneurs Finance Code is really about

Kenya has adopted the Women Entrepreneurs Finance Code, marking a significant step in efforts to close the persistent gender financing gap facing women-led micro, small and medium enterprises (MSMEs). The move was announced by the Central Bank of Kenya (CBK).

Launched in 2023 at the World Bank-International Monetary Fund annual meetings in Marrakech, the global initiative brings together financial service providers, regulators and development finance institutions to expand access to finance for women entrepreneurs.

But what exactly is the Women Entrepreneurs Finance Code? How will it work in practice for women entrepreneurs in Kenya, and why does it matter?

What is the Women Entrepreneurs Finance Code?

In a statement, the CBK said the framework offers financial sector leaders a platform to drive change within their institutions and across the wider financial ecosystem.

"It catalyses new financial and non-financial mechanisms to meet the needs of women-led MSMEs and mobilises capital, while improving standards, policies and regulations to address data gaps and financing constraints," the CBK said.

At its core, the code is a voluntary commitment by financial and non-financial institutions to serve women entrepreneurs better by strengthening leadership accountability, improving data collection and translating evidence into action.

Why data is central to the Code                       

Implementation in Kenya is led by the CBK, with Deputy Governor Dr Susan Koech as the national champion, working with FSD Kenya to ensure strong public-private collaboration.

Lukania Makunda, who leads FSD Kenya's market information project under which the code falls, says this new financial intervention builds on years of work using research and data to advance inclusive finance.

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She explains that extensive demand-side data, collected from households and users of financial services, consistently showed that women were being left behind.

"Demand-side data helps us identify gaps that financial sector players can use to design better products for the population, especially women and other underserved groups," she says.

But the data also revealed a deeper structural problem.

"From FinAccess data, a survey conducted in partnership with CBK, the Kenya National Bureau of Statistics and key financial sector regulators—the Capital Markets Authority, the Retirement Benefits Authority, the Sacco Societies Regulatory Authority, the Kenya Deposit Insurance Corporation and the Insurance Regulatory Authority—we've seen that there's a gap in financing for women," she explains.

"This means there are few solutions that match women's needs, especially in supporting their livelihoods, which are mostly microbusinesses. The bigger challenge is that with 84.8 per cent of Kenyans being formally included, why has there still not been a change in their financial health, which currently stands at 18.3 per cent?"

Since 2008, FSD Kenya has worked to make nationwide supply-side data publicly available to complement demand-side insights. From 2019, the focus sharpened on women-led MSMEs, and the Women Entrepreneurs Finance Code provided a global framework to structure that work.

"The code is a commitment by women-led MSME ecosystem players, both financial and non-financial, to serve women better by leveraging leadership, data and action," Lukania says.

"It's not just a statement. Institutions commit to leadership ownership, to using sex-disaggregated data and to taking action based on that data."

How the Code works in Kenya

Under the Code, participating institutions must appoint a senior leader to oversee implementation, commit to collecting and using gender-disaggregated data, and report on actions taken as a result. While global reporting is expected annually, countries can set their own timelines.

In Kenya, data aggregation has become a central pillar of the approach. Industry bodies, including the Kenya Bankers Association (KBA), the Sacco Societies Regulatory Authority, the Association of Microfinance Institutions Kenya and the Digital Financial Services Association of Kenya, are involved, she explains.

A pilot dashboard developed through the KBA already provides insights into how women-owned MSMEs access credit.

"We needed a way to see the full picture of the credit market," Lukania says, explaining the decision to rely on credit reference bureau data. "That dashboard is the first step. It shows which providers women-led MSMEs are using the most."

Credit-only digital lenders, she adds, are particularly important to the code because of their accessibility to women in business.

"Most women don't access traditional formal credit from banks and Saccos; they're using digital credit for their MSMEs," she says, underscoring why their inclusion is critical to understanding women's financing pathways.

Beyond loans

The ambition of the Code goes beyond credit. It also aims to integrate data on deposits, insurance and pensions—financial services often overlooked in MSME financing debates.

"MSMEs don't just want credit," Lukania affirms. "They also need insurance, they need to understand what their savings can do for them, and how they can be reached."

Meanwhile, reaching informal women entrepreneurs, including small traders whose businesses are unregistered, remains one of the most complex challenges in the financial inclusion industry.

Rather than collecting data from individuals, FSD Kenya is taking what Lukania describes as an ecosystem approach.

"We can't go to individual mama mbogas," she says. "We have to work with aggregators—associations, county governments and financial actors—who can capture that data."

The ultimate goal, she adds, is impact beyond formal markets.

"At the end of the day, we want to see impact in people's lives. Even where we're working with large businesses, there must be a pathway to reach women through jobs, income opportunities and improved financial resilience."

Voluntary but not toothless

Participation in the code is voluntary, and there are no penalties for institutions that sign up but fail to deliver.

"There's no policing," Lukania says. "It's all voluntary, and that's the starting point."

Instead, the model relies on incentives and alignment with institutional mandates.

"By the time an institution commits, it has already identified what it wants to commit to," she says. "Those targets are tied to its own institutional goals."

Kenya's adoption is part of a wider global movement, with about 250 institutions worldwide signed up to the Code.

"We know this won't be a short-term effort," Lukania says.

"It's a significant mountain to climb. But the good thing is that organisations, and their WE Finance Code champions, are eager to be part of the coalition and learn as we grow. And with a shared focus on improving the financial health of women-led businesses and, by extension, strengthening the financial resilience of their families and communities."

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