Dividend Distribution Policy
1. Introduction
The Dividend Distribution Policy outlines the principles and criteria for the declaration and distribution of dividends to the members of Shekel SACCO. This policy aims to balance the dual goals of rewarding members for their investment while ensuring the SACCO’s sustainable growth and financial stability.
2. Purpose
To provide a clear, consistent, and transparent framework for the distribution of dividends to members, reflecting the SACCO’s financial performance and its strategic objectives.
3. Scope
This policy applies to all dividend distributions made by Shekel SACCO to its members.
4. Policy Elements
4.1. Financial Stability
- Dividends will be distributed from net surplus after ensuring that sufficient reserves have been set aside for operational requirements, future investments, and risk contingencies.
4.2. Compliance
- Dividend distribution will comply with all applicable laws, regulations, and guidelines as set by regulatory bodies governing SACCO operations in Uganda.
4.3. Dividend Declaration
- The Committee is responsible for declaring dividends at the end of each fiscal year, subject to approval by members at the Annual General Meeting (AGM).
- The declaration of dividends will be based on the audited financial statements of the SACCO.
4.4. Dividend Rate
- The rate of dividends will be determined after considering the SACCO’s profitability, reserve requirements, future financial needs, and the overall economic environment.
- The dividend rate will be proposed by the Committee and approved by the members at the AGM.
4.5. Eligibility
- To be eligible for dividends, a member must have purchased shares in the SACCO and must have been a member for at least a minimum period as determined by the Committee.
- Members’ accounts must be in good standing, with no overdue liabilities to the SACCO at the time of dividend declaration.
4.6. Dividend Distribution
- Dividends will be distributed proportionately based on the number of shares held by each member as of the dividend declaration date.
- Payment of dividends will be made through Mobile Money, bank transfers or other electronic means approved by the SACCO, ensuring a secure and traceable payment method.
4.7. Retained Earnings
- A portion of the net surplus (10%-40%) may be retained as undistributed earnings for reinvestment into the SACCO’s operations, as per the strategic objectives and operational needs.
4.8. Unclaimed Dividends
- Unclaimed dividends will be held for a period as specified by the prevailing laws and bylaws of the SACCO. After this period, unclaimed dividends may be transferred to a reserve fund or used as per the directives of the Committee.
4.9. Transparency and Communication
- The SACCO will communicate dividend-related information to its members in a clear and timely manner through appropriate communication channels.
4.10. Policy Review and Amendment
- This policy will be reviewed periodically or as necessary to reflect changes in regulatory requirements, economic conditions, or SACCO strategic direction.
- Amendments to the policy must be approved by the Committee and ratified by the members at the AGM.
5. Approval
This policy was drafted by the Xavian Group and has been approved by the founding members of Shekel SACCO during a Special General Meeting and is effective as of 15th September 2026.
6. Implementation
This policy shall be implemented immediately upon approval and communicated to all members.
