Shock On Members Trying Exiting Safaricom Investment Sacco As They Lack Buyers
Exiting Safaricom Investment Co-operative (SIC) proves challenging for members as buyers for their shares are scarce, shedding light on the hurdles of liquidating investments within cooperatives.
Since 2019, the value of SIC’s shares has remained stagnant at Sh52.5 each, marking a notable decline from the peak of Sh525 experienced in 2017 and 2018. This stagnation is partly attributed to diminished returns in recent years.
“The movement of shares in the secondary market has been slow in recent years. We note that this has caused pain and frustration to investors who have decided to sell their shares,” Rabecca Bisanju, chairperson of the supervisory committee says in SIC’s latest annual report.
“The viable option would be to improve the performance of the company to make it attractive to the general, public in order to accelerate share movement in the secondary market. The implementation of the Strategic Plan 2023 – 2027, in particular strategic theme pillar one (growth of the SIC investment portfolio), is expected to result in a dividend payout of at least 13 percent by 2027.”
As one of the largest investment cooperatives in the nation boasting over 5,000 members, SIC predominantly generates revenue from property sales. In the year ending December, the cooperative facilitated the trade of 1.66 million shares, a slight decrease from the 1.67 million shares exchanged in 2022.
Similar challenges are faced by members of other cooperatives primarily engaged in deposit and lending activities, where liquidating share capital entails finding willing buyers among fellow members.
Consequently, SIC has paid a rebate of less than 10 percent since 2019 when it made zero distributions. Last year, it paid a rebate rate of 5.75 percent amounting to Sh143.8 million, down from seven percent (Sh176.9 million) in 2022.
