Business unusual as 4G Capital moves to shield clients from Covid 19 uncertaintiesMarkets tend to be congested and women make up the majority population putting them at a higher risk of contracting the virus because of their day-to-day interaction with all sorts of people.
As the regional financial industry becomes risk averse in the wake of the economic disruption wrought by the Covid-19 pandemic, a micro lender has entered uncharted territory by introducing products that support its customers to scrape through the crisis.
4G Capital a micro-lender operating more than 90 branches in Uganda and Kenya has introduced a micro health insurance scheme for its 104,000 clients in Kenya, with a policy that covers Covid-19 related medical expenses. The policy that is offered through a partnership with underwriter Prudential Life Assurance and distributed by insurance technology innovator Turaco starts at as little as Kshs 10,000 for a year’s cover.
The policy comes in addition to other concessions such as cancellation of late-payment fees for clients who are struggling to meet their loan obligations and a 10 percent reduction in tariffs on new loans.
“During these extraordinary times brought about by COVID-19, the survival of small businesses is critical to the welfare of communities across Kenya as they provide affordable food and vital daily provisions,” says Wayne Hennessy-Barret, 4G’s founder and chief executive.
According to multiple Kenya Government reports on universal health coverage, 62 percent of Kenyan’s don’t have health insurance with the National Hospital Insurance Fund (NHIF) covering only 35 percent of the population. About 1.5 million or three percent of the population are covered by private healthcare insurance schemes.
The bulk of 4G Capital’s customers operate in the informal sector especially markets where a single financial shock could be enough to put one out of business. The lender says the policy which is only available to its Kenyan clients for now, is intended to reduce the risk of loan failure by protecting customers from the devastating financial consequences that would arise from hospitalisation or even death during the pandemic.
According to 4G Capital, 42 percent of low-income households in Kenya suffer a catastrophic financial event caused by hospitalisation at least once every five years. Data from Kenya’s Ministry of Health also shows that close to 13 percent of Kenyans cannot access health care services due to lack of funds, while six percent of households are vulnerable to impoverishment as a consequence of unexpected health care expenditure.
The $10 per annum policy being offered by Turaco, to 4G Capital’s clients is available to people who are hospitalised for three consecutive nights or more, or death. 4G Capital’s clients will be able to claim via WhatsApp or telephone with the cash sent to their mobile money wallets within 72 hours.
“Our mission is to free people from the fear of financial shocks, which is all the more relevant during this COVID-19 pandemic. Although many things in life are uncertain, the ability to access and afford healthcare should not be one of them. We’re glad to be working towards making this a reality for 4G Capital’s clients” says Ted Pantone, the chief executive and co-founder of Turaco.