Sacco members reap big in 2022 dividend payouts

By Steve UMIDHA

Kenyan savings and credit co-operative societies (SACCOs) paid lucrative dividends and interest on members’ deposits in 2022, despite economic hardships occasioned by the disruptive war in Ukraine and last year’s general elections.

Several saving societies made generous cash payments to their members for the financial year ended 31st December 2022 on improved surpluses, increased membership as well as enhanced member deposits, according to data released by some entities.

Read: Steering Committee picks World Bank consultatnts to drive inter-Sacco lending drive 

The top rewarding Saccos last year include the Kenya National Police DT Sacco whose board of directors Tuesday recommended a dividend payout on a share capital rate of 17 percent amounting to Sh552million on deposits at a rate of 11 percent or Sh2.7Billion up from 10.8 percent or Sh2.4 Billion it paid in 2021.

The society’s annual revenue grew to Sh7.9 billion last year from Sh7 billion a year earlier – a 12.9 percent growth.

Similarly, Harambee Sacco, Monday announced an increase in dividends rate on members’ Share Capital at 10 percent last year from 8 percent it declared in 2021. The year also saw the Sacco report gross revenue earnings of Sh5 billion – an all-time high for the 52 year –old Sacco. The society posted Sh5.01 billion for the period ended December 31^st, 2022 from the Sh4.22 Billion it announced in 2021.

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The shareholders of Safaricom Investment Co-operative Sacco approved a Sh176.9 million dividend payout which is 7 percent per share capital last year, up from the 4.7 percent it declared a year earlier. It posted Sh542.9 million last year in total earnings compared to Sh396.3 million in 2021.

Nation DT Sacco society limited on the other hand paid 18 percent Share Capital on members’ deposits, the majority of whom are Kenyan journalists at the rate of 9.5 percent, while Tower Sacco members settled for a share capital of 20 percent on members’ deposits at the rate of 13 percent.

Nyati Sacco paid the highest dividend payout of 21 percent on its share capital and 11.30 percent member deposits in the fiscal year 2021, making it the best dividend payment in last year.

Several Saccos properly resumed such payouts in 2021 after a two-year hiatus, following the unforgiving waves of the Covid-19 pandemic which broke out in 2019, affecting members’ ability to borrow and repay in time.

During the period – between March 2019 and mid-2021, many employees went on unpaid leave while others took pay-cut, with many businesses either recording losses or completely shut down. This saw many Sacco members withdraw their savings to cater to their needs.

“We have had a leadership consultation forum that has come up with a roadmap that will address the sector’s lingering challenges,” said Simon Chelugui, CS for Co-operatives & Micro, Small, and Medium Enterprises (MSMEs).

The improved bonus payouts by firms that have since released their financial performance for the year in review point to better economic prospects for a sub-sector on its way to hitting Sh1 trillion in assets under management by Kenyan Saccos, according to analysts.

“It is a culmination of an improved tightening of our regulatory policies in the sub-sector. A lot of work has gone into the successes we are seeing today,” offered Peter Njuguna, the Chief executive of Sacco Societies Regulatory Authority (Sasra).

Adding, “But there is still more that needs to be done if we are to hit the Sh1trillion milestone goal. From our unaudited industry results for 2022, I can say we are just Sh40 billion shy from achieving that target.”

Kenyan Saccos usually pay dividends regularly at different intervals depending on what members agree on. The interval can range from monthly to annually – but most such payments are done yearly.

Shareholders ordinarily hold annual delegates meetings (ADMs) to decide the dividend and interest rate to offer in the coming financial year – with as many firms typically holding their ADMs in the first quarter of the year.