Agar, a partnership among Kacha, Lucy Insurance, and Global Bank, integrates digital insurance and credit services in Ethiopia. The service allows customers to bypass physical paperwork and includes features for taxi drivers and salary advance loans. It aims to increase insurance penetration in a market with historically low usage, supported by a backdrop of stringent regulations governing insurance premiums.
In a groundbreaking collaboration, a fintech company, a commercial bank, and an insurance provider have launched an innovative integrated digital credit and insurance service named Agar. Announced at Skylight Hotel in Addis Ababa, Agar, which signifies a supporter in Amharic, enables customers to access insurance without physical paperwork. The partnership includes Kacha, the premier private mobile money provider, Lucy Insurance, and Global Bank.
This newly introduced service features a digital credit product tailored for taxi-hailing drivers and a digital salary advance microloan option through Kacha’s mobile application. Adeferes Wesene, CEO of Lucy Insurance, noted that these additions are part of the company’s expanding range of non-life and general insurance products.
Agar incorporates third-party motor insurance, aligning with Ethiopia’s increasing number of cars on the road, which exceeds 1.4 million. Following a new proclamation last year, authorities have mandated increased third-party car insurance premiums, resulting in rates reaching up to 4,360 birr for private vehicles. Agar offers streamlined premiums starting from 5,000 birr through an online platform.
Users must upload information including their vehicle’s plate number, ownership certificate, chassis number, and photographs to activate the insurance via the app. The digital loan service targets two distinct segments: Agar for Drivers provides swift loans for taxi operators, while Agar for Salaried Employees allows employees to access wage portions before payday without collateral.
Furthermore, Agar provides digital loans to assist customers with premium payments, featuring repayment periods that extend from one to nine months. Notably, Ethiopia’s insurance penetration remains under one percent, yet technological advancements have spurred opportunities for tailored services, as evidenced by a recent partnership between Little Ethiopia and Lion Insurance for passenger and driver coverage.
Mikias Fekadu, Partnership and Business Development Manager at Kacha, highlighted that developing the new platform took a year and a half. Access to the digital loan service relies on transaction history through Global Bank, necessitating a single branch visit for activation. Loans can reach up to 50,000 birr, and repayment issues can incur a daily penalty of up to 0.6%, with a nonperforming status achieved after 90 days of delay.
Martha Hailemariam, advisor to the Vice Governor of the National Bank of Ethiopia, stated that the central bank would provide support for implementing these new services. She emphasized the importance of safeguarding customer privacy and ensuring robust cybersecurity measures remain in place to protect sensitive data.
The launch of Agar marks a significant advancement in Ethiopia’s financial landscape, providing streamlined access to digital insurance and credit services. This collaborative effort between Kacha, Lucy Insurance, and Global Bank aims to enhance customer convenience while addressing the country’s low insurance usage. With the integration of technology into financial services, this initiative could pave the way for broader financial inclusion in Ethiopia, especially within underrepresented sectors.
Original Source: shega.co
