In the aftermath of a devastating war that severely impacted its economy, investors in Tigray Regional State face difficulties to resume operations due to financial shortages and the inability to import duty-free materials. For more than 10 million Br loan requests, around 22 investors have been required to appear in person at the bank headquarters without any progress. About 25 others have struggled to access duty-free privileges necessary for importing machinery to rehabilitate their operations.

Tigray Chamber of Commerce has voiced profound concerns, requesting special attention for businesses recovering from the war. According to Haftey Hagos, the secretary-general, businesses have suffered unprecedented damages and face acute difficulties in returning to normalcy.

"A huge amount of finance is needed," he told Fortune.

He noted that loans, interest waivers for three years, duty-free imports, and life insurance for investors are needed. Members convened in the capital with officials from the Ministry of Finance and the National Bank of Ethiopia (NBE) to address the 5.1 billion Br interest accruing annually. They had requested the central bank consider interest waivers from 18 banks and two microfinance institutions, urging loan reschedules and financing.

"Businesses couldn't begin operation," said Haftey.

Frezer Ayalew, head of Banking Supervision at the central bank, said they asked commercial banks a few months ago to consider allowing investors in Tigray easier access to loans and rescheduling for the long term.

"We have done what we could," he said. "Banks must follow their prudent strategies."

Ethiopia's 31 banks, which have issued nearly two trillion Birr in loans and advances as of June 2023, maintain a Non-Performing Loans ratio of around 3.6pc, below the regulatory five percent threshold. Commercial banks are now implementing strict risk management policies due to the high number of non-performing loans in Tigray Regional State. Demsssew Kassa, secretary general of the Ethiopia Bankers Association, said the state-owned Commercial Bank of Ethiopia (CBE) started offering loans at the corporate level.

Executives from Birhan Bank are preparing critical risk-mitigating strategies for another round of loan disbursement. Desta Bekalo, vice president for Strategy & Marketing at the Bank, said they are working on restructuring and cash injections to prepare for new loans. The Bank disbursed 27.35 billion Br in loans and advances, a 30.6pc increase from the previous year. Birhan Bank in 2022/23 generated a 4.39 billion Br in income from interest and loans.

"We have been preparing ourselves for some time," Desta told Fortune, noting that economic activity in the region is a crucial prerequisite for loan financing.

Business consultants believe it is unwise to expect commercial banks to reopen their doors to investors after suffering from unpaid loans. Millon Kibet, a partner at BDO Consulting Plc, suggested that the government could establish a development bank to revive the businesses and the economy. He cited the establishment of the World Bank after World War II as a model for economic recovery.

"Banks have no room for risks anymore," he said.