Bankers propose the National Bank of Ethiopia (NBE) mitigate its regulations and assist in providing loans to their assets that sustained losses during the war in Tigray Regional State.

The 22 commercial Banks under the Ethiopian Bankers Association submitted an assessment report on the impact of war in the regional state last week, indicating a staggering amount of damage to physical assets and jeopardised loan and advance repayments.

Regulators at the central bank had requested the banks to classify loans disbursed in Tigray as non-performing three months ago.

According to Demissew Kassa, secretary general of the Association, the banks performed a month-long assessment of asset quality following the Pretoria deal where 600 of their branches were operational before the conflict.

The report recommends relaxation on the requirements for the borrowers who have not been able to provide the renewed trade license, updated financial statements, tax clearance, and other documents to the banks.

It also suggests that the central bank loosens the asset classification and provisioning directive while suspending terms set for renegotiating loans and advances affected by the war until the situation improves.

The loan portfolio composition requires Banks to keep at 40pc short-term, 40pc medium term and 20pc long-term loans for five years.

Demesew said the percentage of long-term loans should be adjusted to address more businesses affected during the war.

"They can't provide those documents," he said.

Elias Geberemariam is one of the businesses affected by the war. He lives with his family in Mekelle city, the seat of the regional state.

He leased 4000sqm of land in the Ayder Industrial Park to manufacture machines such as stoves and other agricultural machinery over three years ago.

With plans to pay his loans back in five years, he took out a 12 million Br loan with 18pc interest rate from Lion Bank.

Unfortunately, the war broke out only a year after his factory became operational.

"I haven't even started paying back," he told Fortune.