Hon. Wycliffe Oparanya, the Cabinet Secretary for Cooperatives and MSMEs Development, has
issued a stern warning to Sacco leaders regarding the misuse of bank loans for dividend payments. Speaking at the Kuscco’s 9th Annual Leaders Conference in Mombasa, Oparanya underscored that using borrowed funds to pay dividends, especially when the Sacco is operating at a loss, is unacceptable.
“Dividends have become a significant issue for Saccos. It’s not feasible to take out a loan to pay a 20 percent dividend. This practice must cease. If you declare dividends while your Sacco is incurring losses, you will face legal consequences,” he stated.
Oparanya reiterated that Saccos are business entities, not charitable organizations designed solely to satisfy member interests.
