Firms embrace e-money transfer for dividend pay

“We also make payments through the electronic transfer payment system to shareholders who request to be paid in this way.

“For the other shareholders, we are reviewing our dividend payment methods and hope to make other methods available in the near future. We have not used M-Pesa as yet, but it is one of the methods that we will be exploring,” he added.

“Dividend payment has always been an issue for many companies. Last year the bulk of about 50 per cent or Sh430 million was issued via cheque. About 180,000 investors received their dividends via M-Pesa,” Mr Baillie said.

“The fact that we have all these unbanked cheques means that a large number of our shareholders have not yet received their dividends, partly because some have not updated their addresses with us while others simply have not bothered to cash them because the cost of cashing them could be more than the cheques,” Mr Baillie added.

Less expensive

Electronic methods of payment are faster, more secure, more efficient, and less expensive.

“Paying dividends through RTGS, EFT and directly to shareholders’ bank accounts is faster and safer than sending dividend cheques directly to shareholders’ registered addresses where they get lost or are misplaced due to lack of  address codes and interception by fraudsters,” said Mr Sang of KPLC.

“Shareholders consider some of the existing modes of payment as restrictive and therefore we reckon that they would welcome alternative methods of dividend payment,” Mr Kariuki said.