When Are SACCO dividends paid?

In Kenya, Savings and Credit Cooperative Societies (SACCOs) play a significant role in helping individuals save and invest their money. Members contribute to the SACCO through various deposits and investments, including non-withdrawable deposits known as share capital. The returns on these share capital investments are called dividends, which are similar to bonuses. The process of paying out these dividends involves several steps to ensure fairness and compliance with regulations.
The Dividend Payment Process
- Financial Performance Review: The process of paying dividends starts with a review of the SACCO’s financial performance. At the end of each financial year, the SACCO’s management team prepares financial statements that reflect the organization’s economic health and profitability. Based on these statements, the management proposes a dividend percentage. This proposed percentage is intended to share the SACCO’s profits with its members based on their share capital investments.
- Regulatory Approval: Once the management has finalized the dividend recommendation, the financial statements and proposed dividend are submitted to the SACCO’s regulatory authority. In Kenya, this regulatory authority could be the Ministry of Cooperatives or the SACCO Society Regulatory Authority (SASRA). The regulator reviews the financial statements and the proposed dividend to ensure that they meet all legal and regulatory requirements. The approval from the regulator is a critical step as it confirms that the SACCO’s financial operations and dividend proposal are in compliance with the applicable laws and regulations.
- Member Approval: After receiving regulatory approval, the SACCO’s board of directors presents the proposed dividend to the members at the Annual General Meeting (AGM) or Annual Delegate Meeting (ADM). During this meeting, members have the opportunity to review the financial performance, ask questions, and vote on whether to approve the dividend payout. The approval from the members is essential as it authorizes the SACCO to distribute the dividends.
- Dividend Distribution: Once the members have approved the dividend payout, the SACCO proceeds with distributing the dividends. The payment is typically made shortly after the AGM or ADM. The timing of the actual payment can vary depending on the SACCO’s administrative processes and schedules. Members receive their dividends based on their share capital investments, reflecting their contribution to the SACCO’s success.