Banque Populaire du Rwanda (BPR) is offering a tailor-made service called Insurance Premium Financing (IPF) designed to assist businesses to pay annual insurance premiums.
The product is designed with features such as a speedy approval process and a repayment period of up to 10 months at affordable interest rates. The facility allows businesses to manage their cash ?ow by allowing payment of premiums in instalments as against a lump sum, according to a report in New Times.
The premium financing facility can be used to pay for general insurance premiums for commercial property, (fire and other lines of business insurance), machinery and equipment, motor vehicles, and contractors’ all risk.
The bank provides an assured credit line from which a business can draw funds of between RWF100,000 ($101) and RWF200m to pay insurance premiums, targeting small and large businesses. To access the credit facility, a business operator does not need to assign assets as collateral or security for the credit. The bank assesses the customer and works with an insurance company.
After approving the customer's IPF application, IPR transfers funds for the insurance premium directly to the insurer, but to ensure the commitment of the client, the beneficiary also deposits an amount equivalent to two months' premiums.
The repayment of the IPF is in equal monthly instalments for a period of up to 10 months, allowing clients to pay back in a more flexible manner without having to feel the burden of paying upfront or borrowing from elsewhere to pay premiums on insurance.
If the customer defaults on its obligations, the bank can proceed to call on the insurance guarantee and demand for the unutilised portion of the insurance premiums from the insurance company to be used to pay off the outstanding IPF balance.