Hawzen Woreda in the Eastern Zone of Tigray was devastated by conflict. Widespread displacement and the collapse of local economic activity left communities fractured and livelihoods destroyed. Women, returnees, GBV survivors, ex-combatants and persons with disabilities faced compounded barriers to income generation and participation in public life. Stigma and social isolation were pervasive, leaving people vulnerable, afraid, and marginalised within their own communities.

Yet, Hawzen retained real economic potential in dairy, beekeeping and small-scale processing, and local authorities were actively seeking pathways to revive livelihoods and rebuild confidence in public administration. The Peace Support Facility's (PSF) early experience in supporting recovery through standard individual-focused livelihood approaches, however, exposed a recurring constraint: supporting individuals in isolation limits their ability to reach economically viable scale, interact with the wider community and connect effectively to local markets. In post-conflict settings, this creates a missed opportunity to support the social reintegration of marginalised groups and rebuild trust between communities and institutions.

Together, local authorities and the PSF codesigned a novel approach built around cooperatives as a collective, formally structured enterprises that could generate sustained income at scale, actively integrate marginalised groups through shared economic activity, and engage consistently with local markets and institutions.

Rather than a standalone income generation activity, this was designed as an integrated recovery instrument: part of the broader PSF effort to restore local governance and basic services, rebuild social cohesion and revive economic activity in conflict-affected communities. The approach drew on PSF's livelihoods experience and was informed by a recognition that cooperatives, historically treated primarily as a welfare mechanism in Ethiopia, could be redesigned as profit-generating enterprises with transformative social and institutional effects. Another central feature of the approach is its psychosocial dimension. In post-conflict settings, many of the main barriers to reintegration are not only economic but also linked to fear, shame, mistrust, and isolation. By organising livelihoods around regular group interaction and shared roles, the model helps rebuild confidence, trust and social belonging alongside income generation.