The Automobile Guarantee Fund (AGF), a fund that was established by government to compensate people injured or those whose property has been destroyed by unidentified or uninsured automobiles has called for sufficient usage of the funds availed.

The institution General Director Bernardin Ndashimye told the Business Times that only Rwf250 million has been compensated in 5 years yet the fund mobilises about Rwf300 million from insurance premiums every year.

"Liabilities as technical provisions are not exceeding Rwf300 million. This means that a lot of victims are not compensated yet there is a fund to save their lives and properties,” Ndashimye explained.

"It is possible that there are many people out there who don’t know we exist,” he explained.

This compensation package has been existent since 1981 under the management of SONARWA. It was however revised in 2002, with an independent fund created.

The fund has since rose Rwf750 million from 10 percent of premiums paid as ‘motor third party’ to insurance companies and returns from investments.

Ndashimye said that the balance (unutilised) is invested for the fund’s sustainability in the future. He was optimistic that this will raise the fund to Rwf1 billion by the end of next year.

However Ndashimye said that with Rwanda opening its doors to regional integration, with the country’s geographic location, the fund poses a challenge of increasing traffic.

"We might find ourselves paying from damages caused by vehicles, which do not contribute to the fund,” Ndashimye observed, suggesting that other countries in the region should come up with the initiative.

"We have talked to some partner states about the possibility of creating the fund but we also planning a regional meeting to see how we can compensate the cars in the region,” he added.

Currently, the AGF is challenged by the increasing number of fraud and payment defaulting by the insurance companies.

Ndashimye said that about 73 files have been rejected because of making false claims while some insurance companies have failed to pay in time.

He added that a sustainable fund will also help maintain the roads, since they are the major cause of such accidents. 

According to the AGF there are currently about 700,000 automobiles in the country as of June 2009. Currently Rwanda is the only country in the East African Community (EAC) with a motor guarantee fund that is fully operational.

Ndashimye added that the AGF works closely with prosecution and traffic police to investigate and identify which victims are recommended for compensation.

The fund works under the Ministry of Finance.

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