At UMA SACCO, we believe in sharing our success with our members through annual dividends. Here’s a comprehensive explanation of how it works:
What are Dividends?
Dividends are a portion of the profits that UMA SACCO distributes to its members at the end of each financial year. These payments reflect the financial success of the SACCO and reward members for their participation and investment. Dividends provide a tangible return on the members’ shares, incentivizing continued membership and investment in the SACCO.
How is the Dividend Determined?
The dividend percentage varies based on the financial performance of the SACCO each year. This performance is influenced by various factors, including profitability, investment returns, and overall economic conditions. For instance, last year, the dividend rate was 7.6%, meaning each member received 7.6% of the value of their shares as dividends.
Additionally, due to a rights issue last year, the share value for each member increased in line with the dividends received. A rights issue allows members to purchase additional shares, often at a discount, thus increasing their investment and the overall value of their holdings. For more detailed information on the rights issue, please refer to the annual report in the treasurer’s report.
Who Decides the Dividend Percentage (Return in Shares)?
The process of determining the dividend percentage involves several key steps:
Management Proposal: The SACCO’s management team analyzes the financial results and proposes a dividend payout based on the surplus and other financial metrics.
Board Approval: The board of directors reviews the management’s proposal, ensuring it aligns with the SACCO’s financial health and strategic goals. The board then approves the proposal.
AGM Endorsement: The Annual General Meeting (AGM) of members reviews and endorses the board-approved proposal. This endorsement is crucial as it ensures that members have a say in the final decision.
Your participation in the AGM is vital as it gives you the opportunity to understand and influence how your dividends are determined. The key considerations for dividend payouts include:
Surplus for the Year: The profit made after all expenses.
Reserve Requirements: Funds set aside to ensure financial stability.
Liquidity Position: The availability of cash and other liquid assets.
Retained Earnings: Profits kept in the SACCO to reinvest in growth.
Loan Loss Provisions: Reserves for potential loan defaults.
Capital Adequacy: Ensuring sufficient capital to cover risks.
Membership Growth and Retention: The number of members and their ongoing engagement.
Investment Returns: Earnings from investments made by the SACCO.
Economic Conditions: The overall economic environment that can affect financial performance.
Board and AGM Decisions: Strategic decisions made by the board and members.
Tax Considerations: Tax liabilities and strategies to minimize them.
Why Attend the AGM?
Attending the AGM is essential for staying fully informed about your entitlements and the SACCO’s financial health. It also provides a platform to voice your opinions and vote on important decisions that affect your dividends and the overall direction of the SACCO. By attending, you can:
Gain insights into the SACCO’s performance and future plans.
Participate in discussions and vote on key issues.
Network with other members and share your views.
Influence decisions that impact your financial returns and membership benefits.
Join us at the next AGM to stay informed and maximize your membership benefits. Together, we can ensure continued growth and success for all our members.
LET’S GROW TOGETHER!
