Dividend Payments across East Africa – Redux

It’s been four years since this post and the signs are still not encouraging for cross-border dividend payments across East Africa.

Good – Safaricom: I get my dividends by M-Pesa – in fact one came last week, right on the 15th anniversary of the company. At Safaricom, M-Pesa is the preferred method of paying dividends which are below Kshs 70,000 to shareholders – and this would work for almost 99% of their individual shareholders who all own less than 100,000 shares each.

But for Ugandan shareholders of Safaricom, to receive the share of the largest dividend in Kenya’s history ($256 million), they get a cheque in the mailbox  that takes 4 days to clear. The next thing for M-Pesa dividends is to have them automatically reinvested into buying other shares; but for now you can instantly lock the funds away in an interest earning M-Pesa fixed deposit.

No change – Stanbic Uganda: Shareholders in Kenya get a cheque in the mail which takes one month to clear and costs $8-10 per cheque. No improvement, and not likely to change.

Bad:  (a surprising step back this year is) Bralirwa: At last review, Bralirwa (the Rwanda brewery) dividend cheques were issued KCB Rwanda, and KCB Kenya was encasing cheques at their branches in Kenya provided Kenyan shareholders presented their cheques, and proved their identity – they could receive equivalent cash payments up to RWF50K (~$67).

This year that option is not there as KCB Kenya is not encashing cheques! A shareholder has to deposit the dividend cheque into KCB or any other Kenyan bank to get they payment.  I tried that at my Barclays branch and they refused as they simply don’t have Rwanda francs in their bank system.

10 November 2015

2 thoughts on “Dividend Payments across East Africa – Redux

  1. innocent dankaine

    Dear Bankelele,
    The only reason you are receiving dividend cheques for Stanbic is most likely because you have declined to immobilize your share certificate for these shares. I can categorically state that the USE Securities Central Depository enables cross border electronic payment of dividends (unlike CDSC Kenya for now) for all shareholders whose details include the bank account numbers. Kindly get in touch with a USE member broker of your choice and ask them to assist you in this regard. I can also help if you wish.

    1. bankelele Post author

      I cannot ever recall being asked to immobilise Stanbic Uganda shares, either by the company or its registrar.

      That said, even in Kenya, with shares I’ve immobilised, dividend by cheque is my preference (not bank transfer or mobile money)

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