Windfall for savers as Saccos give double-digit dividends

Cooperatives CS Simon Chelugui (right) hands a present to Abdullahi Shariff during Harambee SACCO's AGM on February 20, 2023. [Boniface Okendo, Standard]

Shareholders of Savings and Credit Co-operative Societies (Saccos) are reaping the benefits of record payouts as the credit societies announce surprise higher dividends, having weathered a difficult year to post bumper profits and surpluses.

A majority of Saccos have made higher cash distributions for the year ending December amid improved profitability, even as the economic road ahead remains jittery, according to an analysis by Standard Business.

The Saccos have raised their dividends buoyed by higher earnings, increased loan repayments, and hopes for continued economic recovery.

The higher dividend payments which have ensured tidy returns for shareholders come as a relief, as they will be crucial in helping them cope with the raging cost of living crisis.

Kenya Police Sacco declared dividends on share capital at a rate of 17 per cent amounting to Sh552 million, and interest on deposits at a rate of 11 per cent or Sh2.7 billion, making a gross total of Sh3.25 billion.

Police Sacco whose members are largely drawn from the security agencies and other government employees the previous year had set the dividend rate paid out on members' deposits at 10.8 per cent with payout on members' shares at 17 per cent.

Nakuru-based Cosmopolitan DT Sacco - one of the largest Saccos in the country - paid dividends on shares at a rate of 15 per cent, the same as in 2021 even as it set interest on members' non-withdrawable deposits at a rate of 12 per cent, the same as paid out the previous year.

This represented a total payout of Sh680 million which was an improvement from the Sh600 million paid out the previous year.

This came as the Sacco, whose membership is drawn from salaried employees both in the public and private sector and ordinary merry-go-round groups, grow its asset base to Sh9.1 billion in the year ended December from Sh7.9 billion the prior year.

"Despite the harsh economic times and high inflate rate ... our society reached a figure of Sh9.1 billion in asset base," said Cosmopolitan Sacco Chairman John Muigai.

"The financial analysis shows improvement in membership, members deposits, and loans to members," he added, capturing the positive sentiment that has fueled a dividends boon for Sacco members this keenly watched payout season by shareholders.

Giant Harambee Sacco posted a net surplus of Sh444.6 million last year, compared to Sh362.8 million posted in 2021 triggering a higher payout.

The country's third largest Sacco which has over 80,000 members paid Sh2 billion for member earnings in dividends (10 per cent) and deposits (eight per cent) compared to Sh1.64 billion in members' earnings in dividends (eight per cent) and deposits (seven per cent) the previous year.