Sacco members and their families to wait longer for dividends

The Easter plans of over 20 million Kenyans are in ruins following cancellation of all annual general meetings by the Savings and Credit Co-operative Societies by the government, as a result of the coronavirus pandemic.

The cancellations of the AGMs has consequently put the payment of divided in abeyance.

There are 24,000 co-operative societies with a membership of 14 million members, out of which 13,000 have saccos.

Statistics from the Department of Co-operative indicate that only 6,000 saccos are active.  

Yesterday, the acting Commissioner of Cooperatives, Geoffrey Jang’ombe said it is against the law for a saving’s co-operative society to pay dividends without the approval of members, which is normally given during the AGM.

Co-operative Act

“We are aware that some saccos had already held their AGM. Some held them as early as January. These have paid dividends to their members or are in the process of doing so,” Jang’ombe added.

The commissioner however explained that majority of saccos had not had their meetings as they had planned to hold them before the end of April, which is the deadline stipulated by the Co-operative Act.

This is a big blow to 60 per cent of Kenyans (28 million) who directly or indirectly benefit from saccos and the annual payout as a form of dividend.

“In Kenya, more than 60 per cent of the people benefit either directly or indirectly from saccos. Many had long planned for this money from their societies, which had already given notice of the AGM to approve the payments,” Jang’ombe said.

According to the commissioner, a number of saccos that had bylaws allowing for part payment of dividends before the AGMs were held have already paid members. Those that had no such mechanisms, he explained will have to wait until the government allows for meetings to be held.

On March 16, the Commissioner of Co-operatives wrote to the Savings and Credit Sacco Regulatory Authority, Co-operative Bank of Kenya and all county directors of co-cooperatives and commissioners scrapping all planned meetings.

“Following the outbreak of coronavirus, the government has put in place measures to safeguard public health. You are hereby advised that all general meetings have been suspended for the next 30 days following the presidential pronouncement of March 15 with immediate effect,” the letter read.

This led to a flurry of activities as saccos started notifying eager members that the planned meetings would not take place, dampening any hopes of paying dividends.

One such notice to members seen by the Saturday Standard read in part: “Consistent with these developments, the Management Committee announces the postponement of our AGM that was scheduled for Thursday, March 19, 2020.”

Some sacco members we interviewed said the postponement of the annual meeting was a huge blow to their financial plans since it came at a time when they need money most to mitigate against the pandemic.

“Do not tell me that I will not get my dividend. I have been planning for it for a long time. There ought to be a way we can access our money despite the ban,” said Mary Onyango. 

Another sacco tacitly informed its members: “The Department of Co-operatives has this morning suspended all AGMs for the next 30 days due to the current happenings in the country. Be advised that the 2020 annual general meeting scheduled for Saturday March 28, 2020 has been suspended. We await further communication from the Ministry.”

Jang’ombe said although the Co-operative Act has fixed the deadline for holding AGMs as April 30 of every year, his office has powers to extend the deadline. He said the postponed AGMs will be held once the coronavirus pandemic is contained.