By Christopher Burke
Across Uganda, millions of people live and work on land held under customary tenure. Families have cultivated, inherited and depended on this land for generations, remain locked out of one of the most powerful tools for economic empowerment: access to formal credit. Despite the growing recognition of customary land rights through Certificates of Customary Ownership (CCOs), the financial sector continues to treat these rights as invisible.
Ministry of Lands, Housing and Urban Development (MLHUD) Spokesman Dennis Obbo reports over 90,000 CCOs have been registered to date under Uganda’s legal framework. These are not informal agreements scribbled on paper. CCOs were initiated in the 1995 Constitution of Uganda and detailed in the 1998 Land Act confirms Dr. Rose Nakayi at the Makerere University School of Law. They are issued by District Land Boards and recorded in official registries conferring clear, secure rights to occupy, use and transfer land. Unfortunately these rights are not yet recognized by many banks, microfinance institutions and Savings and Credit Cooperative Organizations (SACCOs).
As Dr. Sylivester Ndiroramukama, Chief Executive Officer at Uganda Cooperative Savings and Credit Union (UCSCU) explains, CCOs fall outside of conventional credit protocols simply because they are not yet fully understood or integrated into the system. The Executive Secretary at Uganda Bankers Association (UBA) Wilbrod Humphreys Owor agrees acknowledging they are yet to be exploited to their full potential. Owor points out that the German development agency GIZ Programme for Responsible Land Policy in Uganda (RELAPU) which has been working to raise awareness of Certificates of Occupancy (CoO) also recognized under law. CoOs were designed for bona fide or lawful tenants occupying Mailo land in central Uganda to formalize their occupancy rights and provide legal security. However, only 558 have been issued to date according to Herbert Kamusiime, a Consultant with GIZ-RELAPU and the Review and Revision of the Uganda National Land Policy (UgNLP). Both CCOs and CoOs could be very useful as collateral and possibly allow us to reduce interest rates submits Agnes Nansereko, General Manager at Sekero Money Lenders, a mid-sized company that originated in Busia, eastern Uganda.
Property Rights without Market Recognition
The logic of property rights lies at the heart of every functioning market economy. As Adam Smith argued, economic growth stems from the ability of individuals to exchange, invest and accumulate capital. Secure land tenure provides the confidence and collateral needed to access capital and participate in voluntary exchange. Without the means to leverage land, often their only substantial asset, Uganda’s rural citizens are denied the freedom to act as entrepreneurs, investors and economic agents. This is a failure of institutions, not individuals. It is not the absence of rights that holds back investment in rural Uganda; it is the inability to operationalize those rights in a way that the market understands and trusts.
A growing number of institutions including GIZ, GLTN UN Habitat, Cadasta Foundation, ZOA and Cordaid have supported the registration of CCOs in different initiatives across Uganda. These efforts help communities secure their tenure, clarify boundaries and formalize rights in a cost-effective and participatory manner details Alex Bwogi at Ujamaa Foundation which is providing support to the US based social enterprise Cadasta Foundation that has registered over 8,000 CCOs in the Busoga Region in eastern Uganda. Until financial institutions adjust their practices, the full potential of these initiative remains unrealized.
Misaligned Systems, Missed Opportunities
Uganda has made impressive strides in financial inclusion. According to the 2023 FinScope study, 81 per cent of Ugandan adults—approximately 20 million people—are now financially served up from just 57 per cent in 2006. However, the 4.6 million adults who remain excluded are disproportionately rural and often hold unleveraged assets in the form of customary land rights. This is not merely a legal oversight. It represents a significant missed opportunity for economic transformation.
More than 80 percent of land in Uganda is held under customary tenure according to Dr. Theresa Auma, Executive Director of Land and Equity Movement in Uganda (LEMU); yet the financial system remains structurally biased toward freehold and leasehold titles, primarily in urban and peri-urban areas. This mismatch results in the systematic exclusion of rural communities from credit markets. A Bank of Uganda’s Financial Capability 2020 Survey suggests significantly less than 10 per cent of rural Ugandans have access to formal loans; entrenching spatial inequality and limiting investment in agriculture, education and small enterprise.
“My late husband left me with five children and two large plots,” explains Peace Abwoolii from Kyegegwa District in western Uganda. “I do not want to sell our family land, but I am unable to get a loan to cover the cost of planting coffee, cocoa or vanilla to earn money.”
This exclusion is not due to high risk, but institutional blind spots. Financial institutions have yet to adjust their risk assessments, underwriting procedures and product designs to recognize CCOs as viable collateral. Zianah Muddu, who heads the Financial Technology Service Providers Association of Uganda (FITSPA) has expressed interest in exploring how digital innovation and fintech solutions can help close this gap and bring rural landowners into the financial mainstream.
From Recognition to Realization
The path forward does not require new regulation or expensive reforms. What it requires is market alignment to ensure that lenders have the tools, information and confidence to treat CCOs as legally valid and economically meaningful property rights. Integrating CCOs into the credit system fits squarely within a liberal economic philosophy that empowers individuals, removes arbitrary barriers to market participation and allows people to use their property as they see fit.
It can invite private capital into underserved areas without distorting the market with subsidies or top-down mandates and provides a low-cost, high-return adjustment to unlock the value already embedded in the land. Moreover, it encourages accountability and transparency. When property rights are recognized and documented, land markets become more efficient, disputes decrease, and families have a reason to invest in long-term productivity.
Don’t Let Paper Rights go to Waste
Uganda has taken a significant step beyond many countries in sub-Saharan Africa with the creation of a legally robust, culturally appropriate mechanism to formalize customary tenure. The CCO system is among the more progressive approaches in Africa, designed to respect local norms while integrating with national systems. However, these rights are only as powerful as the systems that recognize them. Until the financial sector aligns its practices with this legal reality, the true value of CCOs will remain locked away.
Incorporating CCOs into the financial mainstream is not charity, but market rationality. It affirms that Ugandans deserve the opportunity to participate in the economy on equal terms. The market is ready. The land is being registered. Will institutions rise to meet the opportunity?
Christopher Burke is a senior advisor at WMC Africa, a communications and advisory agency located in Kampala, Uganda.
The idea of “Uganda’s Hidden Collateral: Bringing Customary Land Titles Into The Financial Mainstream” is both timely and critical. For too long, women and communities in Uganda especially in West Nile—have been locked out of meaningful access to finance because customary land rights are not formally recognized by banks and lending institutions. Yet, land remains the most valuable asset most rural families own. Unlocking its potential through recognition, documentation, and integration into the financial system can open doors for entrepreneurship, education, and resilience-building.
In short, Peace for Women–West Nile can help transform the concept of “hidden collateral” into visible empowerment for women, by linking land rights, financial inclusion, and gender equality.
It is important to note that Uganda is among the few countries where all four property rights systems are simultaneously in operation. As highlighted in “The Misaligned Systems, Missed Opportunities”, the complexities around Customary Certificates of Ownership (CCOs) need to be more deeply and clearly understood. A good situation is that an untold story that lies in the tensions among the “Baraaro” communities in the northern region. The prevailing “half-truth” is that the Baraaro have purchased portions of customary land. However, the other half of the story is more complicated: those who sold the land may not have been the rightful custodians, as rights often remain with families, lineages, or parents. In many cases, such transactions involve promises, compromises, or even acts of connivance among customary occupants and leaders. This creates an intricate situation with the potential to escalate into significant conflict, as projected in the “Africa Environment Outlook Report (2005)”, particularly with regard to land and water resources. To prevent such tensions, the future of customary occupants and the land resource must be carefully reconsidered. This requires holistic stakeholder dialogue and meaningful cultural engagement aimed at reaching a balanced middle ground.
Although financial institutions have limited understanding of customary tenure system, their reluctance in giving loans to holders of Certificates of Customary Ownership could be attributed to the way customary land is collectively managed by clan, where upon default, the banks may face a serious challenge of getting a potential buyer because the clan discourages sale of customary land