Oral East Africa>Absa finds sweet spot for savings and insurance for small businesses At the hut of the story

Written by Oral East Africa

Absa bank in partnership with Old Mutual have designed Linda Biz, a product that offers small businesses, medical and life insurance at an affordable cost.

Linda Biz also offers insurance for losses against fire, political violence, riots and strikes, floods, business interruption, burglary, loss of money and theft by servants. It also covers employees of the business against injury, disablement or death (WIBA).

The product designed to draw premiums through savings over a few years will help the small businesses save while at the same time have access to insurance payout in case the risks materialize.

The combination of savings with insurance is likely to draw small business deposits to Absa Bank putting the lender on a market lead to secure cheap savings at a time when deposits in the banking sector are very expensive.

“Linda Biz, a first-of-its-kind comprehensive insurance product in the market, will offer assets, medical and life insurance in a holistic solution, addressing specific risks faced by SMEs, ensuring they can build resilience and continue thriving in today’s dynamic business landscape,” Absa Bank Kenya MD and CEO Abdi Mohamed said.

Cost of insurance

For small business the cost of insurance has been the biggest impediment to taking a cover leaving many exposed and at the risk of collapse in case of accidents, sickness and unforeseen dangers.

Yet the SME sector is huge, it accounts for 30 per cent of the Gross Domestic Product (GDP) employs more than 15 million people according to the Kenya Bankers Association 2021 Micro, Small, and Medium Enterprises Survey Report. Yet it lies out of the insurance coverage which currently stands at less than 3 percent of the economy.

Yet insurance is critical especially to small business owners who know that they are a hospital visit away from the collapse of their operations since most are reliant on the labour s of the owners and their families.

Small businesses are also unable to recover from sudden losses that require substantial capital injection and contribute to the statistics that Kenyan businesses scarcely make it past their first few years.

Absa and Old Mutual may have just found a way of capturing this market with the Linda Biz solution which features comprehensive medical insurance with inpatient, outpatient, dental and optical and maternity cover options with attractive benefits such as hospital cash benefits and lifetime cover.

Additionally, Linda Biz offers holistic life insurance cover that pays a lump sum to the insured following death, disability or diagnosis of a critical illness.