Agar, a novel integrated digital service launched by Kacha, Lucy Insurance, and Global Bank, enables customers to access insurance and credit without traditional paperwork. This service caters to both taxi drivers and salaried employees, enhancing financial accessibility in Ethiopia’s low-insurance penetration landscape. Key features include digital loans and online policy management, emphasizing the need for security and regulatory compliance.
In Addis Ababa, Ethiopia, a collaborative initiative among a fintech, a commercial bank, and an insurance company has birthed Agar, an integrated digital service for insurance and credit. Announced at Skylight Hotel, the partnership comprises Kacha, Lucy Insurance, and Global Bank, designed to facilitate insurance access without physical paperwork. The service also features a digital credit option catering to taxi drivers and a microloan feature for salary advances, all available through Kacha’s mobile application.
Agar incorporates a third-party motor insurance policy aimed at car owners, given the rise in vehicle ownership across Ethiopia, which now exceeds 1.4 million vehicles. This transition comes in response to an increase in mandatory third-party insurance premiums, which reached up to 4,360 birr for private vehicles. Agar proposes a starting premium of 5,000 birr, with users able to manage their policy details entirely online.
To initiate coverage, users must upload necessary information including their vehicle details and ownership proof via the mobile app. The platform’s digital loan service targets two key customer segments: taxi operators needing funds for urgent vehicle repairs and salaried employees wanting early access to wages before payday. Furthermore, the service provides loans to assist with premium payments, with terms extending from one to nine months.
Ethiopia’s insurance market remains underdeveloped, with less than one percent of the population covered. However, technological advancements present fresh prospects for tailored services. Recently, ride-hailing services have begun offering insurance for drivers and passengers, further enhancing the market. Mikias Fekadu from Kacha mentioned that the platform’s development spanned eighteen months and relies on transaction history with Global Bank for loan access, requiring only one visit to the bank to activate.
Loans can reach up to 50,000 birr, determined through a credit scoring system that evaluates transaction history. Penalties for late payments may be incurred at a rate of up to 0.6% daily over a period of up to sixty days. The central bank, represented by advisor Martha Hailemariam, will continue to oversee the operations, emphasizing the importance of protecting customer data and enforcing strong cybersecurity measures against potential threats.
The introduction of Agar exemplifies a significant advancement in Ethiopia’s financial services landscape, representing a strategic partnership that blends digital insurance with credit solutions. As the service enhances customer convenience and addresses existing gaps in insurance coverage, its success will rely on robust cybersecurity and data privacy measures, alongside continual oversight from regulatory bodies. This initiative not only signifies progress in financial inclusion but also reflects greater opportunities in Ethiopia’s evolving fintech sector.
Original Source: shega.co
