|dc.description.abstract||Dividend policy is a very important aspect of financial management but remains as the ten
important unresolved problems in finance. This is because it affects such areas as the
financial structure of the firm, the flow of liquid funds, liquidity and investor satisfaction
Not only do managers show extra care in their payout decisions, especially in changing
payout decisions, but also the markets react strongly to dividend changes, and more so, to
dividend omissions and initiation. One of the objectives of the members who are joining
the SACCOs is to maximize their wealth. SACCOs which are not paying dividends have a
problem with financial performance. In addition, managements of SACCOs are torn in
between the payment of dividends or not pay and use the money in financing their debts or
invest it. On the other hand the managements must meet the various needs of wealth
maximization and paying the dividends to the stakeholders. For the management to be able
to balance between the paying of dividends to the shareholders and again invest in projects
that will provide returns to the organization is a major dilemma for the management. The
objective of the study was to determine the relationship between dividends and the
financial performance of Saccos registered by SASRA in Nairobi County.A descriptive
research design was employed in this study. A census was conducted on the target
population of 43 Saccos registered by SASRA in Nairobi County. Secondary data was
collected from the financial statements of target population for the last five years.
Regression model was used to find the relationship between the dependent variable
(Financial performance) and independent variables(Dividend, leverage and organization
growth).From the above regression model, the study found out that there were factors
influencing the financial performance of Saccos registered by SASRA in Nairobi County,
which are dividends, leverage and organization growth. They influenced it positively.
Based on the findings, the study recommends that SACCOs should develop dividend
policies to guide them in establishing and guiding them in surplus distributions. This will
guide them on when to pay dividends, how to pay dividends and when to retain surpluses.
It is also recommended that an investment policy should be developed and implemented.
The study also recommends that shareholders should also understand that, payment of
dividends only marginally reflects good subsequent periods earning prospect there are
many other factors that influence future earnings including Sacco’s investment policy,
operating environment and taxes. Thus they also need to pay attention to these factors
when analyzing performance||en_US