The role of land titles in accessing credit in Uganda

Abstract

The study highlights the critical role of land in economic and human development in Uganda, particularly for rural and peri-urban communities that depend on it for their livelihoods. Secure land tenure is shown to enhance agricultural productivity, empower women, alleviate poverty, improve food security, and promote sustainable resource management. The emergence of microfinance and informal lending since 2008 has provided entrepreneurs with low-interest borrowing options, yet financial constraints remain. The study aimed to investigate the influence of land title possession on access to credit in Uganda, assessing correlations between land title possession and credit accessibility, while also examining factors such as location, literacy, and gender. Utilizing data from the Uganda National Panel Survey (2020) and a probit regression analysis, the findings reveal that both land title ownership and literacy levels are significant predictors of accessing credit. The study supports the hypothesis that possession of land titles significantly enhances access to credit. To improve credit access and economic development, the study suggests that policymakers promote land-titling initiatives for marginalized communities, offer financial education workshops, engage community leaders, and incentivize financial institutions to develop credit-access programs. Overall, these strategies aim to improve financial literacy and inclusion, driving economic growth.