A LAND REGISTER TO SUPPORT THE PROPERTY AND CREDIT MARKET IN UGANDA Lilian Mono Wabineno Dept of Geomatics and Land Management, Makerere University Moses Musinguzi

Overview Introduction Status and information content of the land register in Uganda Status of the property and credit market in Uganda Summary of shortcomings in the property and credit market due to the land registry Emerging research concepts Conclusion

Introduction Various studies have been carried out with a view of improving the land registry in Uganda and some of the studies date as back as 1990 All studies identified major weaknesses in the land registry and recommended that it should be rehabilitated. To implement the recommendations made by the various reports, various projects have been taken up: USAID-funded Support for Private Enterprise Expansion and Development (SPEED) which involved computerizing the daily case handling system by using a record management software called TRIM and scanning of images. World Bank funded Second Private Sector Competitiveness Project

Status and information content of the land register in Uganda The Department of Land Registration and The Department of Surveys and Mapping are responsible for the land registers and maps respectively There are four land tenure systems: customary, freehold, leasehold and mailo There are three land registers Given the poor state of the land registers, it has become difficult for operators in the property and credit market to easily find information about properties to facilitate safe and secure land transactions.

Status of property and credit market in Uganda Credit institutions are categorized into three: Informal institutions formal institutions semi-informal Like the credit market, the property market in Uganda is both formal and informal. Formal land markets Informal land markets

Credit market The process of processing a mortgage is quite lengthy and prohibitive! mortgage deed is prepared The bank makes a title search at the land registry to ascertain that the information given by the borrower is correct. since not all rights and encumbrances are registered in the land registry, the bank has to pay for additional services to ascertain that the property being mortgaged is free from any other rights apart from the ownership right. This additional procedure presents increased costs and time for issuing the mortgage. Consequently, when all rights have been ascertained, the mortgage is registered at the land registry and this concludes the process.

Property market There are no laid down procedures followed during property transactions in Uganda. The procedures exist after individuals have transacted and need to transfer i.e registration For purposes of ascertaining the rightful property, rights and ownership, a property search at the land registry and other investigations have to be done which require additional fees from the purchaser Despite the above short-comings, the property and credit market in Uganda is fast growing but is characterized by high prices and high interest rates

Shortcomings in the property and credit market due to the status of the land registry These high borrowing rates are attributed to various factors and one of them being the mess at the land registry which make credit institutions assume high levels of risks because it is; unsecure or difficult to attach land as collateral Costly to make transactions Risky to transact on land There are unsecure land rights

Emerging research concept With the various efforts the government has put in, the problems in the land registration system of Uganda to support the property and credit market still persist. One approach the government could use is to investigate the content and format of the land registers. Registers should be designed to provide security for the property/right holders and information publically on properties for market participants in order for the market operations to be easier and faster (Mattsson, 2004). This is because access to land without sufficient security is of little use to investors who need secured long-term property rights as collateral for obtaining bank financing (Muir & Shen, 2005).

Based on the needs and gaps outline above, a research study has been proposed. The main aim of the study is to explore how to build a land register that supports the property and credit market in Uganda. The specific objectives are to: examine the appropriateness of the current land register for providing all the required information to support property and credit market in Uganda, examine how content on property ownership, transactions and mortgages are registered To develop a model for a land register that supports property and credit markets in Uganda. The study will be will largely be based in Kampala and Wakiso districts of Uganda.

Conclusion It is difficult for a country to develop in absence of an efficiently operating land market since an efficient land market leads to sustainable development. The fact that the land and credit market are growing in Uganda, the land registry has failed to play its role in providing accurate and comprehensive information. This has led to high transaction costs which have negatively affected the economy. The proposed research will develop proposals for improving the registry in terms of information content so as to support the credit/property market.

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