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Ethiopian coffee importer business is slow because of new credit policy

Tigrai Online
April. 30 2011

Samuel Demisse's coffee-importing business was prospering even after the 2008 financial crisis. New orders poured in, but without enough funding to pay suppliers in Ethiopia, he no longer could fill the demand.

Gone were the pre-crisis days when banks told him he was pre-approved for loans of as much as $100,000. Instead, even though he had always made his payments on time, his bank had slashed his line of credit, and others he visited also turned him away.

"I couldn't fulfill the demand, because I didn't have the working capital," said Demisse, owner of Keffa Coffee in suburban Towson, Md. "Without financing, you cannot do anything.... It's like trying to drive a car without gas."

In the past, the revival of small businesses helped lift the U.S. economy out of recession. But as many larger firms are getting back on solid footing and big banks have returned to profitability, small-business activity has remained unusually sluggish this time around, offering little help in bringing down the unemployment rate.