Agar, an integrated digital credit and insurance service, has been launched through a partnership between Kacha, Lucy Insurance, and Global Bank. The service facilitates vehicle insurance and provides digital loans to taxi drivers and salaried employees, addressing essential financial needs in Ethiopia’s low-insurance environment. The initiative aims to enhance service accessibility while emphasizing the need for robust cybersecurity measures to protect customer data.
A new partnership formed between a fintech, a commercial bank, and an insurance company has led to the launch of Agar, an integrated digital credit and insurance service in Ethiopia. This collaboration includes Kacha, the country’s first private mobile money service provider, Lucy Insurance, and Global Bank. The announcement took place at the Skylight Hotel, showcasing a commitment to streamline access to financial services without traditional paperwork.
Agar not only introduces an innovative insurance service but also features a digital credit offering aimed at taxi drivers and a microloan function designed for salary advances via the Kacha mobile application. Adeferes Wesene, CEO of Lucy Insurance, highlighted that these new services are a natural evolution in the company’s expanding portfolio, which increasingly incorporates non-life and general insurance products.
The insurance provided through Agar is a third-party motor insurance policy, crucial for car owners in Ethiopia, where vehicle ownership has surpassed 1.4 million. Given the recent enforcement of higher premiums for third-party insurance, Agar offers a competitive starting premium of 5,000 birr through an accessible online platform, facilitating the submission of essential vehicle details via the app.
Agar’s digital loan service comprises two segments: “Agar for Drivers,” which expedites access to loans for taxi operators facing urgent vehicle expenses, and “Agar for Salaried Employees,” enabling early access to wages without collateral. Additionally, customers can secure loans to manage their premium payments, with flexible repayment options ranging from one to nine months.
Despite Ethiopia’s low insurance penetration rate, currently below one percent, technological advancements are creating new opportunities for tailored financial services. A recent example includes the collaboration between ride-hailing company Little Ethiopia and Lion Insurance to provide passenger and driver insurance coverage.
Mikias Fekadu, the Partnership and Business Development Manager at Kacha, noted that the launch of this platform followed a year and a half of development. Activation of the digital loan service requires a branch visit to Global Bank to establish transaction history, offering loans up to 50,000 birr based on an automated credit scoring system. There are also specific penalties for delays in loan repayment.
Martha Hailemariam from the National Bank of Ethiopia emphasized the necessity of protecting customer privacy and implementing strong cybersecurity measures to safeguard sensitive information as the new services are rolled out. She affirmed the central bank’s commitment to ensuring the responsible implementation of these financial innovations.
In summary, the partnership among Kacha, Lucy Insurance, and Global Bank marks a significant step in advancing Ethiopia’s financial services landscape. The launch of Agar, which combines digital insurance and credit solutions, reflects a strategic approach to enhancing accessibility to essential financial services. As insurance penetration remains low in the nation, these innovations present promising opportunities for growth and customer engagement while underscoring the importance of cybersecurity and consumer protection.
Original Source: shega.co
