Sacco Dividends are usually calculated on Prorata basis (Prorated), meaning each contribution from your payslip earns you interest. Below is the formula used;
Opening Balance (This is the total Shares that you opened the year 2020 with. as at 1st January 2020) = OB
Monthly Contribution (What you contribute to the Sacco every month) = MC
lets assume your OB is 100,000 and your MC is 2000. You first calculate earnings from your opening Balance as below;
100,000 x (12/12) x (10.1/100). then proceed to calculate your earnings from your Monthly contributions;
MONTH MC MEAN DIVIDEND %
JANUARY 2000 x 11/12 x 10.1/100
FEBRUARY 2000 x 10/12 x 10.1/100
MARCH 2000 x 9/12 x 10.1/100
APRIL 2000 x 8/12 x 10.1/100
MAY 2000 x 7/12 x 10.1/100
JUNE 2000 x 6/12 x 10.1/100
JULY 2000 x 5/12 x 10.1/100
AUGUST 2000 x 4/12 x 10.1/100
SEPTEMBER 2000 x 3/12 x 10.1/100
OCTOBER 2000 x 2/12 x 10.1/100
NOVEMBER 2000 x 1/12 x 10.1/100
DECEMBER 2000 x 0/12 x 10.1/100
Sum up your earnings from your OB and MC from January to December, what you get is your Gross Dividend
Now take the Gross Dividend and less 5% With-holding Tax, what you get is now your Net Dividend
Also note that the Dividend percentage is usually declared during the Members Annual general meeting. The figure may increase or decrease depending on the Sacco’s financial performance in the previous year.
The Dividend for Year 2020 have been declared on 10.1%
I really appreciate this post. I have been looking everywhere for this! Thank goodness I found it on Bing. You’ve made my day! Thanks again
why do we have 0/12? Should it not be 1/12?
The calculation ends in November with 1/12, i have only included December because some members usually ask why December is not factored in the calculation.
Good breakdown. @james for December the contribution is received at the end of the month hence accumulates No 8nterest for the year.
Yes being a cooperator you have really thought me, but my question why no calculate in this simple manner
100000+(12×2000)=124000×10/100=12400
Less 5 %withholding tax.
TO my side this method does not benefit the cooperators but the institution,because goes home with less .prove me wrong.
If we use your suggested formula (Flat rate), it will discourage members on monthly contribution. if i join the Sacco in November and deposit 124,000, i will earn similar Dividends with the member who has been contributing since January. The take-home will also be high thus eating into Sacco’s Reserves
Thank you for elaborating how we get our dividends… Bt may question is what about Christmas savings their is no profits after saving all year…
last year we paid christmas with an interest of 4%. With the economy recovering we anticipate that this year it will be higher
Appreciated
(1)Why do you start calculating in Dec 2019 12/12 instead of jan 2020 meaning l loose divided on dec 2020.
(2) With this method i benefit the sacco and i become a total looser.
(3)During the Agm there was 12/100 divided on capital shares. Were we given?
1. Your Deposits balance as at December 2019, is your opening balance as at 1st January 2020. Meaning your closing balance as at December 2020 is what will be used as the opening balance for January 2021. So there is absolutely nothing that the member is losing.
2. With this method, apart from only paying you the interest from the opening balance, it ensures that you also gain interest from every amount you were deducted for all the months throughout the year.
3. During the AGM it was resolved that Dividend on share capital to be capitalized at 12.5%. meaning it will be ploughed back to increase the shares
Thank you. This is an important information.
Thanks for the formula and online again but why weren’t we given lunch and snacks allowance
The office will get in touch with all members who participated online after dividend payment.
Thanks a lot …you can’t imagine how much you’ve educated me.
I work in a Sacco ,but this formula and clear illustration of how pro rata basis is done has really enlightened me. Thanks much.
Looking forward to know more about Kenyatta Matibabu Sacco.
What do it mean when am told my deposit is prorated? I have shares at IG SACCO,at the moment they are giving dividend advance,I have tried getting but instead am told I have a deposit prorate of 450 and div.amt of 54.10. what does it mean,,yes a few months ago ,I received last years dividend of 7400ksh
Dear Charles, kindly join Matibabu Sacco where you won’t have to worry about Dividend calculations that are opaque in nature.