On the afternoon of January 14, 2020, Khadija Mustafa sat on the waiting benches at a branch of one of the private banks located near National Stadium.

She appeared quite restless as she constantly moved in her seat, checking her mobile now and then. She repeatedly walked over to the counter and spoke to the customer service officers several times.

Khadija was displeased by the responses from the tellers. She had been waiting for more than an hour to collect 300,000 Br she urgently needed. However, Khadija, in her mid-20s, could not withdraw her money as she expected.

“I have to withdraw the money today, because I need it,” she lamented, adding that the reason the clerk gave her did not persuade her.

"The clerk told me that he was processing my check, but he blamed the system for going on and off," she said.

Khadija is not the only person affected by this banking issue. Thirty-year-old Girma Bonkola, who works at a parking lot, experienced a similar problem recently.

After the Ethiopian Christmas, Girma went to the same branch where Khadija was trying to withdraw 40,000 Br, which was sent to him by his brother from his hometown of Hosana. But he could not get service at the time either, since the teller told him that the system was down to process his transaction.

"I was very disappointed about not getting the money on time," Girma told Fortune.

Since the middle of November, most of the commercial and private banks in the country have faced a shortage of cash and are having difficulty in processing transactions that involve larger sums of money.

Usually, from October to February, there is a shortage of cash in the banking industry since the period is known for being a tax season on top of the banks paying dividends to their shareholders.

Bank executives state that they have been facing a liquidity crunch for the past two months. Even though liquidity issues occasionally happen in the industry, the latest one is more severe.

"We currently can pay no more than half a million Birr to each customer," said a clerk at United Bank's Safari branch located on the road from CMC Square to Safari traffic light.

If a customer requests a large amount, the branch waits until the money is deposited or sends the customer to collect the rest of the money from other branches located nearby, according to him.

A senior bank executive working at Bank of Abyssinia says that the issue is directly related to the current harvest season.

"Most of the money is in areas like Gambella, Gonder and Humera that produce cash crops," he said. "The farmers there make the transactions with cash."

To alleviate the issue, his bank started collecting cash from its branches located the cash crop areas starting from the end of November.

"We collect from 20 million Br to 50 million Br every two days,” he said.

The Bank is not only collecting money from the cash crop areas but also from its branches located near Merkato, the largest open market in the capital, which relatively has more cash and disperses it to other branches that are short of cash.

Abie Sano, president of Oromia International Bank and chairperson of the Ethiopian Bankers Association, does not see how the yearly harvest season can cause the shortage.

“During the harvest time, it is obvious that the cash will flow to farmers,” Abie argues.

But Abie believes that the main reason that caused the shortage of cash is that the government did not disperse money into the economy quickly enough after collecting taxes from the public.

"The government also decreased its expenditure on projects, causing a shortage of cash in the economy," he said. "The banking system is not electronic, and people still need cash to make transactions, which contributes to the shortage."

Due to the cash crunch, banks are facing challenges in settling payments and clearing checks among themselves. Over one billion Birr worth of checks is waiting to be cleared at Commercial Bank of Ethiopia's Finfine head office.

However, Yeabsera Kebede, CBE's corporate communications acting director, denies this, saying the shortage is due to higher visits at the specific branch, creating backlogs.