Ethiopian Financial Trio Launch Integrated Digital Credit and Insurance Service
Kacha, Lucy Insurance, and Global Bank have jointly launched Agar, an integrated digital credit and insurance service in Ethiopia. This platform allows customers to obtain third-party motor insurance and access loans for taxi drivers and salaried employees without physical paperwork, aiming to enhance financial accessibility in a country with low insurance penetration rates.
In a significant development for Ethiopia’s financial sector, Kacha, Lucy Insurance, and Global Bank have collaboratively launched Agar, an integrated digital credit and insurance service, aimed at enhancing financial accessibility. This initiative was announced at the Skylight Hotel, marking a notable shift in how insurance and credit services are provided. Customers can now access insurance without the necessity for physical paperwork, streamlining the process considerably.
Agar introduces a unique third-party motor insurance policy, adhering to Ethiopia’s mandatory insurance regulations, particularly as car ownership expands rapidly with over 1.4 million vehicles on the nation’s roads. Premiums collected through Agar start at 5,000 birr, significantly lower than the recently increased mandatory rates of up to 4,360 birr for private vehicles, thus positioning itself as a more affordable option.
The platform offers two distinct digital loan services: one targeted at taxi drivers, providing quick access to necessary funds for vehicle repairs under Agar for Drivers, and a salary advance feature for salaried employees allowing pre-payday wage access without collateral through Agar for Salaried Employees. Additionally, Agar facilitates loans to assist customers in managing their insurance premium payments, with flexible repayment terms from one to nine months.
Despite Ethiopia’s current insurance penetration rate being below one percent, the integration of technology in financial services has created new opportunities for tailored solutions. Recently, Little Ethiopia and Lion Insurance launched insurance coverage for ride-hailing services, demonstrating the rapid evolution of the sector. This growing landscape was underscored by the proactive efforts of Mikias Fekadu from Kacha, who noted that effective access to Agar’s services requires a history of transactions with Global Bank.
Martha Hailemariam, advisor to the Vice Governor of the National Bank of Ethiopia, highlighted the importance of robust cybersecurity measures to safeguard sensitive customer data as the central bank supports these innovative offerings. She urged the collaborating entities to uphold customer privacy in their operations.
The launch of Agar exemplifies the progressive steps being taken towards enhancing financial inclusion in Ethiopia, leveraging technology to meet specific industry demands and improve service accessibility in a largely untapped market.
The launch of Agar by Kacha, Lucy Insurance, and Global Bank marks a pivotal advancement in Ethiopia’s financial landscape, integrating vital digital insurance and credit services. This initiative not only aims to simplify the insurance process for vehicle owners but also expands financial access for taxi drivers and salaried employees. With a commitment to maintaining customer privacy and cybersecurity in this innovative service structure, Agar has the potential to significantly enhance financial inclusion in Ethiopia, which currently has one of the lowest insurance rates globally.
Original Source: shega.co
