Safaricom ditches cheques for faster dividend payment tools

From Left; CEO of Safaricom Telecommunications Ethiopia PLC Wim Vanhelleputte, CEO of Safaricom PLC Peter Ndegwa and Chief Finance Officer Dilip Pal during Safaricom’s 2023/2024 half year financial results announcement on November 9, 2023, at Michael Joseph Centre. FILE PHOTO | BILLY OGADA | NMG    

By PATRICK ALUSHULA More by this Author

Safaricom has locked shareholder dividend disbursements to electronic platforms including bank transfers and M-Pesa, ditching the use of cheques for

such transactions.

The telco, in a notice, has asked all its shareholders to update their details with its shares registrar to provide information stating their preferred electronic payment mode.

Safaricom said the switch will allow it to pay its shareholders in a “more efficient way”.

Read: Treasury to book Sh7.7bn from Safaricom interim dividend

“In an effort to efficiently communicate with our shareholders, it is hereby brought to your notice that Safaricom Plc through its shares registrar, Image Registrars Ltd, requires all shareholders to update their contact information, dividend payment details and convert to electronic payment modes from cheques,” said the telco in a notice.

“For shareholders receiving cheques, you are encouraged to provide your bank account or registered M-Pesa details for payments going forward.”

The changes come ahead of the payment of the Sh0.55 per share interim dividend amounting to Sh23.64 billion that the telco’s board declared on February 21. The interim dividend will be paid on or about March 31, 2024, to shareholders who were on the register of members as of the close of business on March 15, 2024.

To update their information, shareholders can fill out an online form or email the information to Image Registrars.

Safaricom previously said that cheques take a while before getting to the shareholders. The telco has, therefore, been encouraging shareholders to choose more efficient modes of payment such as electronic fund transfer (EFT), real-time gross settlement (RTGS), or M-Pesa.

While electronic payments will bring convenience to thousands of shareholders, they will have to contend with costs attached to these services as opposed to the nil dividend cheque clearing charge by most banks. M-Pesa withdrawals for instance attract up to Sh108 while EFTs deduct up to Sh200 in many banks.

Read: Safaricom cuts interim dividend for first time after profit drop

The telco, which had 534,719 shareholders as of March 2023, has also asked shareholders with Central Depository & Settlement Corporation (CDSC) accounts to visit their respective stockbrokers and update details.

It said the update will be used to pay any outstanding dividend, where applicable, and future dividends.

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