Ethiopia’s first digital insurance and loan service, Agar, was introduced on Thursday in a groundbreaking partnership between Global Bank Ethiopia, Lucy Insurance S.C., and Kacha Digital Financial Services.
Aimed at addressing the needs of insurance clients, metre taxi drivers, and salaried workers, Agar offers digital loan and savings options, overcoming the barriers of traditional insurance models.
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Challenges with Ethiopia’s insurance industry
The insurance industry in Ethiopia has historically been constrained in its scope and expansion by onerous paperwork and inflexible documentation processes.
Many potential customers, particularly those who view insurance as a luxury, have been reluctant to engage with traditional services.
“The traditional insurance system inhibited the sector’s growth, reflected in its minimal contribution to the country’s GDP,” says Lucy Insurance CEO Adefris Wesen, acknowledging this constraint.
But with the introduction of “Agar,” digitisation is poised to transform service delivery, improve accessibility, and strengthen the industry’s economic contribution to the country.
Importance of digital finance
The National Bank of Ethiopia (NBE) has played a key role in advancing digital financial services in keeping with Ethiopia’s ambitious Digital 2025 agenda.
Digital finance is essential for promoting financial inclusion, according to Hailemariam, advisor to the Deputy Governor of NBE, adding, “this partnership will contribute to Ethiopia’s Digital 2025 initiative and enhance accessibility, while ensuring accountability, cybersecurity, and consumer protection.”
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Benefits of Agar Digital Insurance
As Ethiopia’s first insure-tech product, Agar Digital Insurance allows customers to easily purchase insurance via mobile devices, eliminating the need to visit a branch. The service offers a hassle-free, paperless experience.
Beyond insurance, the Kacha mobile app also provides digital loans to facilitate premium payments. Flexible repayment plans, ranging from one to nine months, ensure customers maintain coverage even during financial difficulties.
Flexible repayment plans ranging from one to nine months are available to customers, guaranteeing continuous coverage even in times of financial difficulty.
Agar for Drivers, which provides meter taxi drivers with instant access to digital loans for urgent auto repairs or expenses, and Agar for Salaried Employees, a salary advance loan service that enables workers to access a portion of their pay prior to payday without collateral, were also introduced on Thursday.
This innovative, digital-first strategy has the potential to increase the efficiency, affordability, and accessibility of insurance and financial services, launching Ethiopia’s financial industry into a new phase of innovation and inclusivity.