Implication of Land Regularization in Accessing Credits from Financial Institutions in Tanzania

Abstract

A linkage between land regularization and access to credit has been a policy priority in developing countries including Tanzania. However, formal credit markets in these countries are underdeveloped and expectations that land titling through land regularization improves access to credit are muted. A study to examine the implication of land regularization in accessing credit from formal financial institutions in Tanzania was carried out in two areas of Kimara and Buhongwa Wards in cities of Dar es salaam and Mwanza respectively. Data were collected through household questionnaire survey and key informant interviews. A total of 450 respondents were involved in this study. The regression model was used to estimate credit access from financial institutions. Findings observed insignificant implication to credit access mainly because most land owners with certificate of right occupancy had no enabling environment to link legally documented plots with the formal financial institutions to support household activation of investment on land. We also found that land owners issued with certificate of right of occupancy felt that, lack of collateral was a major stumbling block for formal credit access. We conclude that there is a need to restructure the financial plans to get coordinated and/or integrated with plans to regularize land and structure strategies to mitigate risks from households and/or firms and financial institutions to enhance household to access formal credits and activation of investments on land in regularized areas.

Socio-economic Factors Affecting the Sustainability of Chololo Pits Technology in Semi-Arid Dodoma: The Case of Chamwino District, Tanzania

“…In a study in Buhongwa and Kimara, Mbilinyi et al (2022) found that land regularisation had insignificant implications to credit access, because most land owners with certificates of right of occupancy had no enabling environment to link legally documented plots with formal financial institutions to support household activation of investment on land. According to Benjamin et al ( 2020), properly arranged land ownership systems influence agricultural productivity and production through effective land security and investment demand.…”