Common dividend range in Kenyan SACCOs

Dividends are one of the most attractive benefits of joining a Savings and Credit Cooperative Organization (SACCO). They represent a share of the surplus that a SACCO distributes to members after a financial year. In Kenya, dividends vary from one SACCO to another, but there are common ranges that members can expect based on typical performance and financial practices.

Understanding these ranges helps members make informed decisions about where to save and invest their money.

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What Are SACCO Dividends?

A dividend is a portion of the SACCO’s profit paid to members at the end of the financial year. It is usually calculated as a percentage of:

Share capital — the amount a member has invested in SACCO shares, and
In some cases, deposit savings.

Dividends are in addition to interest earned on savings and loan rebates.

Why Dividend Ranges Matter

Dividend rates are a key measure of a SACCO’s financial health and performance. They show how well a SACCO uses member funds to generate profit and how much it returns to members.

However, dividend rates are not fixed across all SACCOs. They depend on several factors:

Volume of loan disbursement and repayment performance
Interest income earned
Operational costs
Loan defaults
Investment returns
SACCO policies and member approvals

Common Dividend Range in Kenyan SACCOs

While dividend rates change annually and after member approval at the Annual General Meeting (AGM), common dividend ranges in Kenyan SACCOs typically fall within the following bands:

Dividend on Share Capital: 10% – 20%

For many established SACCOs, dividends on share capital often range between 10% and 20%. This is the portion of profit shared with members based on their share holdings.

High-performing SACCOs with strong loan books and low default rates often pay dividends at the higher end of this range.
Smaller or emerging SACCOs may pay lower percentages as they build reserves or invest in growth.

Dividend on Savings (where applicable): 2% – 6%

Not all SACCOs pay dividends on deposit savings, but those that do usually offer between 2% and 6%.

This reward reflects earnings on members’ savings balances.
Higher savings and longer membership often result in better returns.

Interest Rebates on Loans: Variable (5% – 15%+)

Many SACCOs offer interest rebates or patronage refunds to borrowing members.

Rebates may range from 5% to 15% or more depending on SACCO policies and annual performance.
Rebates reduce the cost of borrowing and are a significant benefit for active loan users.

Why Rates Differ Across SACCOs

Dividend rates differ from one SACCO to another because of:

Loan Repayment Performance

SACCOs with strong repayment rates generate more surplus and can afford higher dividends.

Operational Costs

Higher management or administrative costs reduce the amount available for dividends.

Investment Strategy

Some SACCOs invest in government securities or business ventures, which can increase surplus and lead to higher dividends.

Retention vs Distribution

SACCOs may choose to retain part of the surplus for future expansion or stability, lowering dividend payouts for that year.

Examples of Dividend Outcomes

To illustrate, here is how different types of SACCOs often perform:

SACCO Type	Typical Share Dividend	Savings Dividend	Loan Rebate
Large, Established SACCO	15% – 20%	4% – 6%	8% – 15%
Mid-Size SACCO	12% – 18%	3% – 5%	5% – 10%
Smaller SACCO	10% – 14%	2% – 4%	3% – 8%