Egypt: Regulator eases premium payments on micro-loan covers
Source: Middle East Insurance Review | May 2020
The Financial Regulatory Authority (FRA) has revealed that microfinance agencies have reached agreement with insurers for the former to pay compulsory microinsurance premiums on behalf of their clients until the economic situation caused by the COVID-19 pandemic has improved.
The agreement is part of initiatives taken by the FRA to maintain stability, reported Amwal Alghad.
The insurance covers the risk of death and total permanent disability of customers who have taken micro-loans from the microfinance institutions. The amount of insurance is equal to the loan balance owed by the client.
The authority added that, based on an actuarial study it has prepared to estimate the maximum insurance premium rate with customer data received from microfinance entities. The maximum insurance premium is estimated at 30 piasters per month per EGP1,000 ($63.90) insured amount. There are around 3m microfinance clients in Egypt. M
EGP1 = $0.06