Zawadi Bus Services shut down operations over sh1.7b debt
“After the lockdown between 2020 and 2021, Stanbic Bank generated accrued interest and arrears of sh1.25b, and added it to the original loan borrowed in 2019. The loan rose to more than sh4b and it became impossible to manage. We have been paying back, but the outstanding amount is now sh1.7b,” Madraru said.
Simon Amajuru Madraru, one of the directors of Zawadi Bus Services, said the business was greatly affected by the Covid-19 lockdown that led to the accumulation of interest on the loan they took from Stanbic Bank. (Credit: Doreen Tasia)
ADJUMANI - Zawadi Bus Services has suspended its operations over a debt of sh1.7b, which has put the company under severe financial strain.
Zawadi Services Limited is owned by seven directors. However, two of them from Adjumani and Moyo districts are now deceased.
The shutdown has raised concerns among passengers, employees and other stakeholders, who have been depending on the bus company for transport services and survival.
The company is said to have accumulated a debt of sh1.7b from Stanbic Bank, making it increasingly difficult to meet its operational and financial obligations.
Rising costs of running public transport, coupled with outstanding liabilities, are believed to have contributed to the crisis.
“After the lockdown between 2020 and 2021, Stanbic Bank generated accrued interest and arrears of sh1.25b, and added it to the original loan borrowed in 2019. The loan rose to more than sh4b and it became impossible to manage. We have been paying back, but the outstanding amount is now sh1.7b,” Madraru said.
The company is said to have accumulated a debt of sh1.7b from Stanbic Bank, making it increasingly difficult to meet its operational and financial obligations. (Credit: Doreen Tasia)
Dr. Emmanuel Amaza, the managing director of Zawadi Bus Services, appealed to the Government, financial institutions and other stakeholders for assistance, saying a bailout could help the company settle its obligations and resume operations.
“The effect of the lockdown is real, though people look at it as individual issues. I started bringing the issue to the attention of the President since August 2022. The directors don't know what to do, but the fact is that the lockdown was the worst experience, which the company had not prepared for,” Amaza explained.
The shutdown has affected 42 workers, who depend on the company for their livelihood, as well as passengers who relied on its buses for regular travel.
Christin Abe, an accountant who worked with the bus company for 17 years, expressed fear that following the shutdown, she may not be able to support her family.
“I am a single mother who joined Zawadi in 2009. My firstborn is at the University because of the support from Zawadi. When we got information about the shutdown, we got scared. We don't know what to do next,” Abe narrated.
For Zawadi Bus Services, however, the immediate challenge remains finding a way to address its Sh1.7b debt burden and secure the funds needed to return on the road.
When the company got funding from Stanbic Bank in 2019, it acquired eight new buses plying from Kampala to Yumbe, Arua, Koboko, Moyo, Gulu and Adjumani.
Zawadi Services also owns Zawadi Construction Company and Zawadi Hotel.