Millions of farmers under the co-operative movement will next week receive a stimulus package of sorts as Co-operative Bank of Kenya pays out a record dividend of Sh5.9 billion to shareholders.
The hefty dividend payout, the largest in the banking sector so far, is for 2019 when the lender made a net profit of Sh14.3 billion.
The listed bank’s board approved a dividend payment of Sh1 for every ordinary share.
The money will be released on Friday next week after the Capital Markets Authority (CMA) suspended the requirement for dividend payout to be ratified by shareholders during annual general meetings
The CMA suspension of shareholder’s approval is due to the outbreak of the coronavirus pandemic that has seen the government prohibit all social gatherings.
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It is a tough period for most Kenyans with the pandemic disrupting the flow of money and leading to the closure of businesses and loss of jobs.
The bank says the cash will give its shareholders - co-operative societies - a major boost during the tough times.
Co-op Bank Chief Executive Gideon Muriuki said the payout is expected to offer relief and boost the ongoing efforts to mitigate the severe economic hardships caused by the Covid-19 pandemic.
“With the current Covid-19 challenges, the critical need to release the much-needed funds to the grassroots in the over 15 million-member co-operative movement and line with CMA guidelines, the bank is progressing to make the dividend payment for ratification at the next AGM,” he said.
Since most of the cooperative societies are agricultural, and with agriculture being the backbone of Kenya’s economy, the money could have a huge impact on Kenyans.
Almost half of Kenyans are either engaged in crop farming or keep livestock as their main source of income.
The pandemic has seen a lot of responsibilities heaped on banks, with the Central Bank of Kenya cutting its benchmark lending rate as well as the Cash Reserve Ratio, so that banks can offer cheap loans to individuals and businesses.
