Ethiopian Financial Trio Launches Agar: A New Digital Credit and Insurance Service

Agar, an integrated digital credit and insurance service, has been launched by Kacha, Lucy Insurance, and Global Bank in Ethiopia. The platform provides an innovative way for users to access insurance without physical paperwork, as well as digital loans for taxi drivers and salaried employees. The initiative seeks to boost financial inclusion in Ethiopia, where insurance penetration is very low, amidst growing vehicle ownership.

In a noteworthy collaboration, Kacha, Lucy Insurance, and Global Bank have introduced Agar, an integrated digital credit and insurance service, aimed at providing customers with seamless access to insurance and loans. Announced at the Skylight Hotel in Addis Ababa, this service enables users to obtain insurance digitally, circumventing traditional paperwork requirements.

Agar is designed to serve taxi-hailing drivers and salaried employees by offering tailored financial products. The service includes a digital salary advance microloan available through Kacha’s mobile application, alongside a vehicle insurance component. Lucy Insurance’s CEO, Adeferes Wesene, noted that these developments enhance the company’s non-life and general insurance portfolio.

The insurance aspect of Agar consists of a third-party motor insurance policy, which is mandatory in Ethiopia, where the number of registered vehicles exceeds 1.4 million. With the recent increase in insurance premiums—now up to 4,360 birr for private cars—Agar provides a more affordable alternative, starting premiums at 5,000 birr via an online portal.

Users of the Agar service can activate their insurance by submitting vehicle details through the app. In addition to the personal finance support, Agar for Drivers assists taxi operators with quick access to loans for maintenance and urgent needs, while Agar for Salaried Employees allows workers to access wages prior to payday.

Ethiopia’s insurance penetration remains low, with less than one percent of the population engaged in insurance services. The adoption of technology is unlocking new possibilities for tailored offerings, with recent initiatives by ride-hailing companies introducing insurance coverage for both passengers and drivers.

Mikias Fekadu from Kacha highlighted that the digital loan service relies on transaction histories linked to Global Bank, with a single branch visit necessary for activation. Users may secure loans of up to 50,000 birr, determined through an automated credit scoring process.

Concerning cybersecurity, Martha Hailemariam, an advisor at the National Bank of Ethiopia, stressed the importance of protecting customer data. She indicated that ensuring robust cybersecurity protocols is imperative for the success and trustworthiness of these new financial services.

The launch of Agar represents a significant advancement in Ethiopia’s financial services sector, combining digital insurance and credit offerings to cater to the needs of taxi drivers and salaried employees. By leveraging technology, Kacha, Lucy Insurance, and Global Bank aim to improve insurance accessibility and financial support for various segments of the population. With a focus on robust customer data protection, these developments are set to enhance financial inclusion in a country where insurance adoption is currently minimal.

Original Source: shega.co