Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya

Solomon Munyoki Kathuo; Oluoch Oluoch; Agnes Njeru

doi:doi:10.11648/j.ijfbr.20200605.12

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Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya

Solomon Munyoki Kathuo, Oluoch Oluoch, Agnes Njeru

Published in International Journal of Finance and Banking Research (Volume 6, Issue 5)

Received: 15 September 2020 Accepted: 22 October 2020 Published: 30 October 2020

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Abstract

This study explored the influence of sacco lending rates on dividend payout among saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members. There are variabilities in dividend payout based on different sacco sectors. Saccos pay dividends on a different percentage from the previous year. Different saccos have varying rates of interest charged on loans lend to members. The present study targeted all registered DTSSaccos in Kenya (n=179) over an eight-year period (2012-2019). The study used panel data. Descriptive results showed that Sacco Lending interest rates which reflect the capacity of saccos to generate income, which they could distribute as dividends were on a downward trend, between 2012 and 2019 and large scale saccos had highest rates. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital. The findings from this study are useful to the board of directors and management team of companies in deciding an appropriate lending rate for the company. The results are also useful to shareholders in making investment decisions. The study extends empirical evidence on dividend policy determinants which are currently reported to be inconclusive. In addition, the study fills the lacuna in the existing literature by focusing on the issue of dividend policy determinants in the context of an emerging sector, namely saccos.

Published in	International Journal of Finance and Banking Research (Volume 6, Issue 5)
DOI	10.11648/j.ijfbr.20200605.12
Page(s)	96-101
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Dividend Payout, Sacco Size, Lending Rates, Loans, Investment Decisions

References

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APA Style

Solomon Munyoki Kathuo, Oluoch Oluoch, Agnes Njeru. (2020). Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya. International Journal of Finance and Banking Research, 6(5), 96-101. https://doi.org/10.11648/j.ijfbr.20200605.12

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ACS Style

Solomon Munyoki Kathuo; Oluoch Oluoch; Agnes Njeru. Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya. Int. J. Finance Bank. Res. 2020, 6(5), 96-101. doi: 10.11648/j.ijfbr.20200605.12

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AMA Style

Solomon Munyoki Kathuo, Oluoch Oluoch, Agnes Njeru. Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya. Int J Finance Bank Res. 2020;6(5):96-101. doi: 10.11648/j.ijfbr.20200605.12

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@article{10.11648/j.ijfbr.20200605.12,
  author = {Solomon Munyoki Kathuo and Oluoch Oluoch and Agnes Njeru},
  title = {Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya},
  journal = {International Journal of Finance and Banking Research},
  volume = {6},
  number = {5},
  pages = {96-101},
  doi = {10.11648/j.ijfbr.20200605.12},
  url = {https://doi.org/10.11648/j.ijfbr.20200605.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20200605.12},
  abstract = {This study explored the influence of sacco lending rates on dividend payout among saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members. There are variabilities in dividend payout based on different sacco sectors. Saccos pay dividends on a different percentage from the previous year. Different saccos have varying rates of interest charged on loans lend to members. The present study targeted all registered DTSSaccos in Kenya (n=179) over an eight-year period (2012-2019). The study used panel data. Descriptive results showed that Sacco Lending interest rates which reflect the capacity of saccos to generate income, which they could distribute as dividends were on a downward trend, between 2012 and 2019 and large scale saccos had highest rates. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital. The findings from this study are useful to the board of directors and management team of companies in deciding an appropriate lending rate for the company. The results are also useful to shareholders in making investment decisions. The study extends empirical evidence on dividend policy determinants which are currently reported to be inconclusive. In addition, the study fills the lacuna in the existing literature by focusing on the issue of dividend policy determinants in the context of an emerging sector, namely saccos.},
 year = {2020}
}

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TY - JOUR
T1 - Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya
AU - Solomon Munyoki Kathuo
AU - Oluoch Oluoch
AU - Agnes Njeru
Y1 - 2020/10/30
PY - 2020
N1 - https://doi.org/10.11648/j.ijfbr.20200605.12
DO - 10.11648/j.ijfbr.20200605.12
T2 - International Journal of Finance and Banking Research
JF - International Journal of Finance and Banking Research
JO - International Journal of Finance and Banking Research
SP - 96
EP - 101
PB - Science Publishing Group
SN - 2472-2278
UR - https://doi.org/10.11648/j.ijfbr.20200605.12
AB - This study explored the influence of sacco lending rates on dividend payout among saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members. There are variabilities in dividend payout based on different sacco sectors. Saccos pay dividends on a different percentage from the previous year. Different saccos have varying rates of interest charged on loans lend to members. The present study targeted all registered DTSSaccos in Kenya (n=179) over an eight-year period (2012-2019). The study used panel data. Descriptive results showed that Sacco Lending interest rates which reflect the capacity of saccos to generate income, which they could distribute as dividends were on a downward trend, between 2012 and 2019 and large scale saccos had highest rates. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital. The findings from this study are useful to the board of directors and management team of companies in deciding an appropriate lending rate for the company. The results are also useful to shareholders in making investment decisions. The study extends empirical evidence on dividend policy determinants which are currently reported to be inconclusive. In addition, the study fills the lacuna in the existing literature by focusing on the issue of dividend policy determinants in the context of an emerging sector, namely saccos.
VL - 6
IS - 5
ER -

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Author Information

Solomon Munyoki Kathuo

Department of Economics and Finance, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Oluoch Oluoch

Department of Economics and Finance, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Agnes Njeru

Department of Economics and Finance, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya

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APA Style

Solomon Munyoki Kathuo, Oluoch Oluoch, Agnes Njeru. (2020). Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya. International Journal of Finance and Banking Research, 6(5), 96-101. https://doi.org/10.11648/j.ijfbr.20200605.12

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ACS Style

Solomon Munyoki Kathuo; Oluoch Oluoch; Agnes Njeru. Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya. Int. J. Finance Bank. Res. 2020, 6(5), 96-101. doi: 10.11648/j.ijfbr.20200605.12

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AMA Style

Solomon Munyoki Kathuo, Oluoch Oluoch, Agnes Njeru. Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya. Int J Finance Bank Res. 2020;6(5):96-101. doi: 10.11648/j.ijfbr.20200605.12

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@article{10.11648/j.ijfbr.20200605.12,
  author = {Solomon Munyoki Kathuo and Oluoch Oluoch and Agnes Njeru},
  title = {Influence of Sacco Lending Rates on Dividend Payout Among DT Saccos in Kenya},
  journal = {International Journal of Finance and Banking Research},
  volume = {6},
  number = {5},
  pages = {96-101},
  doi = {10.11648/j.ijfbr.20200605.12},
  url = {https://doi.org/10.11648/j.ijfbr.20200605.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20200605.12},
  abstract = {This study explored the influence of sacco lending rates on dividend payout among saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members. There are variabilities in dividend payout based on different sacco sectors. Saccos pay dividends on a different percentage from the previous year. Different saccos have varying rates of interest charged on loans lend to members. The present study targeted all registered DTSSaccos in Kenya (n=179) over an eight-year period (2012-2019). The study used panel data. Descriptive results showed that Sacco Lending interest rates which reflect the capacity of saccos to generate income, which they could distribute as dividends were on a downward trend, between 2012 and 2019 and large scale saccos had highest rates. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital. The findings from this study are useful to the board of directors and management team of companies in deciding an appropriate lending rate for the company. The results are also useful to shareholders in making investment decisions. The study extends empirical evidence on dividend policy determinants which are currently reported to be inconclusive. In addition, the study fills the lacuna in the existing literature by focusing on the issue of dividend policy determinants in the context of an emerging sector, namely saccos.},
 year = {2020}
}

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