March 29-Unless Uganda puts in place an efficient and reliable land registration system which enables easy verification, it is unlikely interest rates will fall significantly, because real estate and land remain the most widely accepted form of collateral.
“We should not expect to see interest rates on loans from financial institutions going lower unless we have a strong system in place where issues pertaining to true ownership of property and land can be easily accessed,” Dr. Fred Muhumuza an economist said.
Dr. Muhumuza was speaking at the National Land Dialogue under the theme ‘The Land Sector in Uganda delivering Uganda to middle income status by 2020, Key opportunities and set backs’.
He said frequently, financial institutions have had to suffer heavy losses after they discover that the property presented as collateral actually belongs to someone else. The costs involved with litigation then become an added financial burden on the bank.
Dr. Muhumuza said it is this type of fraud that forces many banks to keep lending rates relatively high or halt lending together, except to long term customers with good track records.
Betty Amongi, the Minister for Lands said the Ministry is committed to computerisation of land titles given the many benefits its offers to different users, but especially as a reference point for those who seek loans.
Robert Opio, the acting Commissioner for Land Registration at the Ministry said since registration is key to opening up opportunities and eliminating conflicts, they are in partnership with Uganda Investment Authority to have a one- stop centre. It is here where searches and verification can be conducted in a period lasting between 10 to 15 minutes.