Agar, an integrated digital credit and insurance service, has been launched by Kacha, Lucy Insurance, and Global Bank in Ethiopia. The platform provides third-party motor insurance and digital loans targeting taxi drivers and salaried employees. With low insurance penetration in the country, Agar presents a valuable opportunity for growth, while emphasizing the importance of customer privacy and security.
In a groundbreaking collaboration, three Ethiopian financial entities, including a fintech, a commercial bank, and an insurance company, have introduced an integrated digital service named Agar. This innovative platform enables customers to access both digital credit and insurance without the need for physical documentation. The announcement was made at Skylight Hotel, featuring Kacha, the first private mobile money service provider, alongside Lucy Insurance and Global Bank.
Agar, which translates to “supporter” in Amharic, provides a digital insurance product specifically for third-party motor insurance, crucial as car ownership in Ethiopia rises, with over 1.4 million vehicles on the roads. This service allows users to pay premiums starting from 5,000 birr via an online portal while fulfilling mandatory insurance requirements. To initiate the insurance, users must provide vehicle specifics through the application.
The platform also offers innovative digital loan services aimed at two user groups. “Agar for Drivers” facilitates quick access to loans for taxi operators needing urgent repairs, while “Agar for Salaried Employees” allows workers to access part of their wages before payday without collateral. Moreover, Agar assists customers in managing premium payments with repayment periods of one to nine months.
Notably, Ethiopia’s insurance penetration rate is notably low, under one percent, presenting significant growth opportunities for technological solutions tailored to specific market needs. Recent ventures, including an insurance scheme for ride-hailing services by Little Ethiopia and Lion Insurance, further indicate the opening of new opportunities in this sector.
Mikias Fekadu, Partnership and Business Development Manager at Kacha, commented on the development that preceded Agar’s launch, stating that access to loans is dependent on transaction history with Global Bank. Loan amounts can reach up to 50,000 birr, with penalties for delays reaching 0.6% per day, marking the loan as nonperforming after 90 days.
Martha Hailemariam, advisor to the Vice Governor of the National Bank of Ethiopia, emphasized the importance of cybersecurity and customer privacy in this new project, indicating that regulatory oversight will be crucial to its success.
The launch of Agar marks a significant advancement in Ethiopia’s financial landscape by merging digital insurance and credit services into one platform. This initiative not only caters to the growing needs of vehicle owners but also assists various user segments, particularly taxi drivers and salaried employees, in accessing vital financial services. The emphasis on customer privacy and cybersecurity protocols underscores the commitment to safely implement these innovative solutions in the Ethiopian market.
Original Source: shega.co
