Land and Equity Movement in Uganda (LEMU) on November 8, 2025, released the findings of the study on “Land documentation as a means of enhancing rural farmers/cooperatives access to financial services.”
The study received funding from Deutsche Gesellschaft für Internationale Zusammenarbeit-Responsible Land Policy in Uganda (GIZ-RELAPU) with specific aim to understand the use of Certificates of Customary Ownership (CCOs) as collateral for loans among farmers and the general population in the Lango and Teso sub-regions.
The customary land tenure system, which constitutes over 80% of land across the greater northern Uganda, has long been critiqued by economic development theories, policy makers, and a section of development partners for being less supportive of promoting economic development, since it is difficult to mortgage unregistered land and generate capital from the land.
Financial institutions, therefore, according to the project, find it difficult to ascertain the creditworthiness of customary landowners, using customary land as a basis for advancing agricultural credit.
“The 9-year project registered a successful issuance of over 10,000 CCOs in a bid to improve land tenure security and promote the use of land to access financial credit,” Adventino Banjwa, the Co-Principal Investigator in the study, said.
Banjwa stated that the project further aimed at facilitating the assessment of a farmer’s creditworthiness without necessarily using land as collateral.
Dr Theresa Auma, the LEMU Executive Director and the Principal Investigator, said that LEMU was approached and supported by GIZ-RELAPU in 2025 to assess both community (CCO owners where land was registered) and Financial Service Providers within Lango and Teso.
This was done to understand the hindrances and opportunities that existed in the use of CCOs for accessing financial credit from financial service providers.
The study, according to Dr Theresa Auma, was carried out between July and October 2025, and 3%, representing only 2 people out of 157 CCO owners interviewed within Lango and Teso sub-regions, had used their CCOs for accessing financial credit.
A significant 97% of CCO owners did not use their land documents to access credit or loans from financial institutions. Why?
• The majority of small-holder farmers use their land for subsistence production.
• Avoid using land as a form of collateral for loans. The majority of small-scale farmers use other forms of collateral, not land, for accessing financial credit/loans.
• Only 3% of CCO owners used their land documents to access loan services from financial institutions. Of the 157 CCO owners engaged in the study, only two people mentioned using their CCOs to obtain loans, representing only 3% of the CCO owners engaged in the study.
• Difficulty in obtaining family and clan consent from the loan applicants.
• Getting a loan/access to finance was not among the reasons people registered their land.
• No/low demand for loans among rural households.
Respondents made statements such as, “I have not encountered any problem that requires me to get a loan”, “I have no demand for a loan”, “I have no urgent need at the moment”. Some people operate very “small economies” at the household, only aiming at meeting their basic needs and not interested in getting loans for the sake of it.
• Financial institutions prefer land titles, considering CCOs as less important.
• People did not know that they could use these land documents (CCOs and LIPs) to gain access to finances.
• People feared that financial institutions might take original copies of their CCO documents.
• The long process for obtaining loans by financial institutions made the use of CCOs not even an option.
• Fear of failing to repay the loan, leading to foreclosure.
• Some CCO owners felt a CCO was “too important” to be used as collateral for a loan.
• Gender considerations still disadvantaged women from the use of CCOs to access financial credit.
• Some CCO owners did not see the need for a loan because there existed other rural, rather flexible financial services where no collateral was required.
• Bank behaviour/impunity of money lenders was yet another hindrance to people using their CCOs to obtain loans.
Why did financial institutions not issue loans to CCO owners
Financial institutions or financial service providers (FSPs) cited limited knowledge of CCOS/Land Inventory Protocols (LIPs): Many FSPs assessed had limited or no knowledge concerning CCOs and LIPs. Up to 60% of assessed FSPs had never heard of CCOs/LIPs.
The complex position of consent: from family, clan, and community, makes the loan process lengthy, expensive, and risky for financial institutions, as clans and families make it difficult for the land to be sold/foreclosed.
Regulatory barriers: the regulatory environment within financial institutions’ function has not created the necessary conditions for them to do so because two major financial regulatory bodies, the Bank of Uganda (BoU) and Uganda Microfinance Regulatory Authority (UMRA), have not issued guidelines on the use of customary land (CCOs in particular) as strong collateral for loan services.
The complex ownership regiis of customary land as socially embedded: consent is always required from many family members and clan leaders before an applicant can obtain a loan.
Management complexities to comply with clan consent: many contemporary clan leaders are very busy men, oftentimes well-educated. Not in their villages/territories full-time.
Location of the land: difficulties that are involved in selling rural land.
Susceptibility to fraud: Many FSPs indicated that the complexity of customary land renders it susceptible.
“For 22 years now, LEMU has progressively protected, promoted, and defended customary land rights in Lango, Teso, Karamoja, and Acholi sub-regions,” says Racheal Aduk, communications and advocacy officer at LEMU.
The full findings can be downloaded here.
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