Abstract: The liquidity position of microfinance banks (MFBs) plays a pivotal role in their financial stability and ability to fulfill their mission of promoting financial inclusion and alleviating poverty in Kenya. Equity financing is a significant source of funding for MFBs, yet its impact on the liquidity position of MFBs remains unclear as documented in empirical evidence. Hence, this study investigates the impact of equity financing on the liquidity position of microfinance banks (MFBs) in Kenya and provides recommendations for policy and practice.