By Our Reporter
SOROTI CITY
A newly released report from the Land and Equity Movement in Uganda (LEMU) shows that no one in the Teso sub region has utilized Certificates of Customary Ownership (CCOs) as collateral for acquiring loans from financial institutions in over a decade.
From 2016 to 2025, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, through its Responsible Land Policy in Uganda (RELAPU) program, has overseen the registration of CCOs and Land Inventory Protocols (LIPs) across districts such as Soroti and Katakwi in Teso, as well as Dokolo and Amolatar in Lango.
More than 8,000 CCOs were distributed to families 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.
This research was undertaken in response to government assertions that with proper land documentation, people could secure financial credit, utilizing this capital to launch businesses and foster development.
“We aimed to evaluate the potential for economic development stemming from registered land,” a spokesperson noted.
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 CCO.
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 the presentation on the challenges of using CCOs and Land Investment Plans (LIPs) as collateral for loans, Dr. Theresa Auma Eilu highlighted several significant barriers that individuals face.
Many participants expressed that obtaining consent from family and clan members is a major hurdle since CCOs are registered in the names of all family members, and most owners are unaware of the implications of these documents.
“Not all family members would agree to one person securing a loan, as their names are all associated with the CCOs,” she remarked.
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.
Additionally, some financial institutions are hesitant to provide loans to individuals with CCOs. There is a widespread concern that banks may retain original documents, while others regard CCOs and LIPs as too valuable to submit to financial entities.
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, mentioned that LEMU was engaged for research because they observed individuals hurrying to banks after obtaining land documents in pursuit of agricultural loans. Financial institutions were using CCOs as a measure of creditworthiness in these cases.
He emphasized the importance of community awareness regarding formal processes at banks, particularly the necessity of obtaining consent from all family members when using CCOs 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, has voiced concerns about the practices of some financial institutions regarding the opacity of their loan products’ terms and conditions. He noted that this lack of clarity has deterred many from seeking loans from certain banks.
Moses Eroju Emugu, the chairperson for Katine sub-county, highlighted that many individuals sign loan agreements filled with legal jargon that is difficult for the average person to comprehend.
“Some financial institutions have taken advantage of local residents, encouraging them to sign forms laden with complex legal terms that are not easily understood by borrowers,” he stated.
George Enangu, a resident of Asuret sub-county, expressed that there is a significant shortage of accessible information about credit opportunities.
Some financial institutions officials who were present at the dialogue responded that CCOs 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), remarked that some financial institutions require scrutiny, as they may be failing their clients.
“Why do banks impose such stringent conditions and complicated terms? We need to examine your operations because you are not serving your clients well,” the RDC stated.
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.
Samuel Enangu, the district vice chairperson, warned that the practice of leveraging land titles for loans can lead to unmanageable debt, advising clan leaders to refrain from unnecessary land sales, especially regarding individuals’ residences.
Despite these challenges, several speakers acknowledged that the availability of community credit organizations (CCOs) in Katakwi and Soroti Districts has contributed to a decrease in insecurity associated with land disputes.
