Cooperatives and MSMEs Development Cabinet Secretary Wycliffe Oparanya has instructed Commissioner for Cooperatives Development to develop a Dividend Policy for Cooperatives that will ensure that no cooperative borrows to pay dividends.
The CS who was speaking in Nairobi during the launch of the strategic plan 2023-2027 for new Kenya Planters Cooperative Union (KPCU) said the policy will ensure no cooperative declares dividends when they have made losses.
Oparanya said that many cooperatives have been collapsing because officials declare dividends even when they have made losses.
“I have instructed the Commissioner for Cooperatives Development to develop a Dividend Policy for Cooperatives that will ensure that no cooperative borrows to pay dividends or declares dividends when they have made losses. In the end, the spirit of the cooperative movement – “Service to Members” as opposed to profiteering, must be preserved,” Oparanya said.
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The Cabinet Secretary said the ministry is developing a cooperatives guide code of ethics for state corporations, which will provide a blueprint for the management of cooperatives.
In Several Saccos in the country, the managements have been declaring big percentage of dividends in order to be reelected.
Dividends are the most common form of distribution of a portion of a company’s profits to its shareholders.
By Obegi Malack
obegimalack@gmail.com
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