Insurance Premium Finance
Insurance Premium Finance is a loan product for payment of annual premium in advance. The bank’s customers pay their insurance premiums on equal monthly installments at manageable interest rates consequently, reducing the impact of lump-sum payments to their insurance companies or brokers.
Target market – SMEs and corporates with a relationship with multiple insurance policies for fixed or current assets. Minimum exposure of TZS 1 million and aggregate of TZS 2.5 billion.
Contractual agreement:
- A tripartite agreement between the bank, insurance (underwriter) and the company is to be drawn and executed by all parties governing the entire facility
- The IPF will be given for a period to a maximum of ten months- the first-month premium is to be paid upfront
- Security: postdated cheques (dated seven days in advance) and/or a standing instruction to debit account on payment due date
- Policies endorsed by the insurers to be submitted to be bank after payment of premium
- The policy will be canceled and or terminated if the installment goes unpaid for more than seven days
Products features
- Commercial assets and or residential (on an exception basis)
- Principal and interest payments are to be paid monthly failure of which necessary recovery action will be initiated
Interest rates
The bank will charge a flat rate of interest as illustrated below, however, the bank reserves the right to adjust the rates accordingly depending on the prevailing market conditions
| 3 months | flat rate (USD): 3.25% | flat rate (TZS): 6.50% |
| 4 months | flat rate (USD): 3.50% | flat rate (TZS): 6.75% |
| 5 months | flat rate (USD): 3.75% | flat rate (TZS): 7.00% |
| 6 months | flat rate (USD): 3.00% | flat rate (TZS): 7.25% |
| 7 months | flat rate (USD): 4.25% | flat rate (TZS): 7.50% |
| 8 months | flat rate (USD): 4.50% | flat rate (TZS): 7.75% |
| 9 months | flat rate (USD): 4.75% | flat rate (TZS): 8.00% |
| 10 months | flat rate (USD): 4.25% | flat rate (TZS): 8.25% |
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