A report on CCOs about obtaining a loan with documents of customary land/ Photo by Emmanuel OlingaA new report has highlighted says communal landowners in Teso and Lango still find difficulties in accessing credit using certificates of customary ownership as collateral.The finding in the report conducted Land and Equity Movement in Uganda (LEMU) says banks and other financial institutions were reluctant to accept certificates of customary ownership.The landowners also said obtaining consent from all the members listed on the certificate of community ownership was another challenge.Article 237 (3) provides for the tenure systems as (a) customary, (b) freehold, (c) mailo (d) leasehold. Under section 4 (a) it states that all citizens owing land under customary tenure may acquire a certificate of ownership in a manner prescribed by parliament.A Certificate of Customary Ownership is an official document from the State saying that you are the owner of the land, because customary law recognized one as the rightful owner of the land.It had been hoped that issuing communal landowners with certificates of community ownership in area like Teso, Acholi and Lango where land is communally owned would help them to turn their dead capital (land) into usable capital for development.The findings revealed a stark reality: no individuals in Soroti and Katakwi districts had used their land documents to obtain loans for development, with the exception of one person from Amolatar and Dokolo, who successfully secured a loan using their Certificates of Customary Ownership. From 2016 to 2025, GIZ through its Responsible Land Policy in Uganda (RELAPU) program has supported the registration of Certificates of Customary Ownership and Land Inventory Protocols (LIPs) in Soroti and Katakwi in Teso, as well as Dokolo and Amolatar in Lango.More than eight thousand Certificates of Customary Ownership were handed over to communities in the sub-counties of Omodoi and Toroma in Katakwi, along with Asuret, Katine, and Tubur in Soroti district.In July and August of 2025, GIZ partnered with LEMU to investigate how effectively these land documents have been utilized by individuals seeking loans for development.These insights were presented during a multi-stakeholder dialogue focused on leveraging customary land documents as collateral for accessing finance, held at Soroti Lukiiko Hall on Friday, October 03, 2025.During a presentation on the challenges of using certificates of customary ownership and Land Investment Plans (LIPs) as collateral for loans, Dr. Theresa Auma Eilu highlighted several significant barriers that individuals face.Many people interviewed in the report said that obtaining consent from family and clan members is a major hurdle since certificates of customary ownership are registered in the names of all family members. They said most communal lands owners are unaware of the implications of that document.“Not all family members would agree to one person securing a loan, as their names are all associated with the CCOs,” said Eilu.Other concerns included fear of repayment failure leading to the loss of land, the lengthy process of securing CCOs or LIPs, low household demand for loans, apprehensions regarding bank practices, and a prevalent preference among financial institutions for individual land titles.It emerged that some financial institutions were are hesitant to offer loans to individuals that present certificates of customary ownership.Dr. Eilu noted the existence of alternative and more accessible lending options that do not require land documentation, such as Village Savings and Loan Associations (VSLAs).She also pointed out that limited information on the consequences of crop failures contributed to the reluctance to engage in the formal banking sector.According to the report, GIZ did not emphasize loans as a primary reason for land registration; instead, the focus was on ensuring tenure security.Samuel Eriaku, the GIZ team leader said that Land Equity Movement (LEMU) was engaged for research because they observed individuals hurrying to banks after obtaining land documents in pursuit of agricultural loans.He emphasized the importance of community awareness regarding formal processes at banks, particularly the necessity of obtaining consent from all family members when using Certificates of Customary Ownership as collateral to prevent potential loss of land.Conversely, Eriaku stressed the importance for banks to recognize that these documents are legal and valid, acknowledged by the government and prevalent within community levels.“The findings are intriguing, showing that communities view CCOs as vital for protecting their land rights, while banks are becoming more aware of the existence and significance of CCOs,” Eriaku said.Pastor Robert Ewangu, who runs a money lending institution in Soroti City voiced concerns about the practices of some financial institutions regarding the opacity of their loan products terms and conditions. He noted that the lack of clarity has deterred many from seeking loans from certain banks.Moses Eroju Emugu, the chairperson for Katine sub-county said some financial institutions have taken advantage of local residents encouraging them to sign forms loaded with complex legal terms that are not easily understood by borrowers.Some financial institutions officials who were present at the dialogue said Certificate of Customary Ownerships are not good to be used as a collateral because many people are captured in the document and sometimes the land has graves which makes them difficult to sell in case one fails to repay the loan.Hajj Imran Muluga, the Soroti Resident District Commissioner (RDC) wondered why banks impose stringent conditions and complicated terms. “We need to examine your operations because you are not serving your clients well,” said Muluga.Muluga encouraged individuals to consider government initiatives like Emyooga and PDM over banks, suggesting that approaching financial institutions should be a last resort.He emphasized the importance of encouraging community members to engage in business activities, such as buying and selling produce, instead of turning to money lenders, who often retain important documents like ATMs and national IDs.Moses Esatu, the Principal Assistant Secretary representing the Chief Administrative Officer (CAO) of Soroti, cautioned against using land titles to secure financial services from banks, noting that their complex terms may be unmanageable for local individuals.-URNThe post Landowners Still Face Hurdles Accessing Credit Through Communal Certificates appeared first on Business Focus.