Insurers and Micro-Finance Institutions (MFIs) as per NBE’s Directive can both now fully be involved in the microinsurance business alongside micro-insurance institutions, at the capital of 10 million birr for comprehensive insurance services.
The ‘licensing, license renewal and product approval for microinsurance providers directive no. SMIB/3/2020’ that was issued by the National Bank of Ethiopia (NBE) has allowed the formation of microinsurance companies and also given a right to the mainstream insurers to run microinsurance businesses without separate licenses.
The directive allows MFIs to undertake the microinsurance business with a separate unit, with keen supervision by NBE.
The directive, article 6.1, allowed micro-insurers to provide all microinsurance products including weather index insurance, however the weather index product shall be subject to prior reinsurance treaty arrangements.
Companies that demand to run microinsurance should have a paid up capital of three million birr for life or long term insurance business and seven million birr for general insurance business. A company which demands to run both businesses must have a paid up capital of 10 million birr.
The directive stated that the microinsurance business unit of a microfinance institution must at all times maintain a financially sound position by holding assets in a separate microinsurance business unit fund to meet the minimum capital requirements set out in sub article 5.3.3, which states that the minimum paid up capital for life business as three million birr and 7 million birr for general business, or the minimum solvency requirements prescribed in the relevant directive for the microinsurance business whichever is greater.
The directive article 5, sub article 3.1, indicated that a microfinance institution may carry on credit life insurance to its loan clients without authorization from NBE to conduct its business.
Excluding credit life, MFIs shall establish a microinsurance business unit for the management and running of the microinsurance operation.
According to the directive article, 6 sub article 2.1, the maximum sum insured per risk for microinsurance products (life and general) shall not exceed one percent of the paid up capital of the life or general microinsurance business.
Belay Tulu, Director of Insurance Supervision Directorate at NBE, clarified that the maximum one percent of the paid up capital is that related to the amount stated for microinsurance.
The insurance business in the country is very limited and its contribution to the GDP is similarly small.
There have been several pilot microinsurances whose application have spanned over 15 years but it had not addressed the massive population. “Now the directive will help to scale up the tests,” Belay said.
The microinsurance directive is stated as a support to realize the movable asset loan. The movable collateral has targets to address those who are not included on the formal access to finance schemes.
The movable collateral registry directive indicated that five percent of the annual loan disbursement of banks to be allocated to the agriculture sector, which mainly focused on micro, small and medium enterprises and cooperatives.
The recently issued namely, ‘codification, valuation and registration of movable properties as collateral directive no. MCR/02/2020’ is expected to implement the highly anticipated loan scheme.
“The directive may simplify the operation and minimize the potential risks in the lending process for banks thus creating easy and simple access to credit,” Temesgen Zeleke, Director of Financial Inclusion Secretariat at NBE said on the discussion with the representatives of financial institutions on the meeting held on the 9th of September at the headquarters of NBE.
On the codification process both serial number and non-serial are included, while valuation is managed by relevant government bodies and affiliates like Ethiopian Commodities Exchange.
“When the new loan scheme commences those who have saving on informal system would come to the formal saving that means at banks,” the Director of Financial Inclusion Secretariat said.
“It may improve the resources at financial institutions that would be instrumental for loans on the new scheme,” the NBE official added.
The new directive will present an opportunity for equitable financial scheme. “Currently banks are collecting savings from rural areas but their financing for the stated locations is very low. Therefore, the new directive will help to address all parts of the society in terms of financing,” Temesgen said.

Noncommunicable diseases increase risk of dying from COVID-19

With several African countries now expanding COVID-19 testing, the World Health Organization (WHO) and the Africa Centres for Disease Control and Prevention (Africa CDC) have launched a network of laboratories to reinforce genome sequencing of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), the virus that causes COVID-19, in Africa.
Twelve specialized and regional reference laboratories in the network will provide sequencing, data analysis and other technical support services to the countries where they are located as well as to neighboring countries and countries in their sub-regions.
“As we continue to tackle the COVID-19 pandemic in Africa, being able to not only track its evolution, but also assess the possible mutation of the virus is crucial to mounting an effective response,” said Dr Matshidiso Moeti, WHO Regional Director for Africa. “Through this new laboratory network dedicated to genome sequencing we can better develop vaccines and treatment which are tailored to Africans and eventually bring COVID-19 under control.”
Ongoing sequencing is already providing crucial information for determining the type of SARS-CoV-2 lineage circulating in some countries. It has shown that most of SARS-CoV-2 genomes circulating in Africa are assigned to the B.1 lineage which emerged from the epidemic in Europe.
In Africa ten lineages have been identified and more than 80,000 sequences have been produced globally. Grouping viruses from different countries into the same lineage or sub-lineage has indicated a linkage or importation of viruses between countries. Countries such as the Democratic Republic of the Congo (DRC) and South Africa are experiencing localized transmission, while there is also importation of cases in the DRC from Ghana, Morocco and Senegal.
“In 2019, Africa CDC launched the Institute for Pathogen Genomics to support the integration of pathogen genomics and bioinformatics into public health surveillance, outbreak detection and investigations, and improve disease control and prevention in Africa. The establishment of the COVID-19 sequencing network will help improve surveillance in the continent and help countries to effectively manage and control the pandemic. As the COVID-19 pandemic curve flattens in Africa, we must be prepared for a possible resurgence as already observed in some countries. With genomic sequencing we can have a better understanding of the pandemic through more precise identification of transmission clusters,” said Dr John Nkengasong, Director of Africa CDC.
Africa CDC and WHO together with other partners, are providing Member States with sequencing equipment, reagents and technical support to accelerate SARS-CoV-2 sequencing in Africa. A total of 2016 sequences from 18 countries – Algeria, Benin Republic, Cameroon, DRC, Egypt, Gambia, Ghana, Kenya, Madagascar, Mali, Morocco, Nigeria, Senegal, Sierra Leone, South Africa, Tunisia, Uganda, and Zambia – have already been generated.
This WHO and Africa CDC partnership to establish a COVID-19 sequencing laboratory network is very important in determining the response to a given SARS-CoV-2 strain and in helping countries manage localized or imported transmission.
In related development, there is increasing evidence that Africans living with noncommunicable diseases (NCDs) such as hypertension and diabetes are more likely to suffer severe cases of COVID-19 and die.
In South Africa, which accounts for nearly half of all cases and deaths on the continent, 61% of the COVID-19 patients in hospitals had hypertension and 52% had diabetes. And 45% of people aged 60-69 who died from COVID-19 also had hypertension. In Kenya, around half of COVID-19 deaths occurred in people with NCDs, while in the Democratic Republic of the Congo, such patients accounted for 85% of all COVID-19 deaths.
According to a WHO preliminary analysis of 14 countries in the African region, hypertension, diabetes, cardiovascular disease and asthma are the co-morbidities most associated with COVID-19 patients. These chronic conditions require continuous treatment, but as governments address the ongoing pandemic, health services for NCDs have been severely disrupted.
“Millions of Africans living with noncommunicable diseases are at greater risk of complications or dying from COVID-19,” said Dr Matshidiso Moeti. “So it is very concerning to find that just when people with hypertension and other chronic conditions most need support, many are being left out in the cold.”
In a WHO survey of 41 countries in sub-Saharan Africa, 22% of countries reported that only emergency inpatient care for chronic conditions is available, while 37% of countries reported that outpatient care is limited. Hypertension management has been disrupted in 59% of the countries, while diabetic complications management has been disrupted in 56% of the countries.