A Critical Analysis Of The Impact Of Mortgage Transaction On Uganda's Economy

Abstract

This study was conducted in Central Uganda with the research entitled 'A critical analysis

of the impact of mortgage transaction on Uganda's development. Uganda economy is

smallholder agro-based employing over 80% of the population which is mostly rural.

Women contribute the bulk (over 70%) of the agricultural labour force. Traditionally

proceeds from these activities mostly accrue to men as they perceive themselves as

owners of the land which women cultivate and as heads of households. On the other

hand, a substantial proportion of men engage in either the informal self - employment or

as wage earners in urban centres. This situation notwithstanding, the changing trends

such as rapid urbanization, poverty and increasing number of femaleheaded households

has also contributed to an increasing number of women joining the commercial sector

both formal and informal. Currently the proportion of women in the informal sector

particularly in urban centres is almost the same as that of men. An increasing number of

women are involved in trade, real estate and service sector; yet, the chances of accessing

credit both in the formal banking and the informal sectors is premised on possessing

tangible collateral in form of immovable and/or movable property. Mortgaging enables the

individual property owner to raise other forms of capital mainly credit to undertake or

continue with other economic activities because of its impact on capital accumulation

(Mugume: 2004). Access to formal credit is premised on the existence of negotiable

security and availability of a reliable stream of income to service the loan. In Uganda's

context, the most suitable negotiable security is a title deed arising out of registered land

Table of contents

Declaration ___________________________ ii

Approval iii

Dedication iv

Acknowledgement v

n~e~oo~~ ~

List of Cases viii

Statutes ix

Abstract x

Abbreviations/ Acronyms xi

CHAPTER ONE 1

INTRODUCTION TO THE STUDY 1

1.0 Introduction 1

1.1 Background of the Study 1

1.2 Statement of the Problem 5

1.3 Purpose of the Study 7

1.4 Objectives of the Study 7

1.5 Research Questions 7

1.6 Scope of the Study 8

1. 7 Significance of the Study 8

1.8 Methodology 8

1.9 Literature Review 9

CHAPTER TWO 13

NATURE AND REQUIREMENTS FOR MORTGAGES IN UGANDA 13

2.0 Introduction 13

2.1 Nature of the mortgage 13

2.2 Mortgage requirements 15

vi

2.3 Creation of mortgages _____________________ 15

2.4 Registered/ legal mortgage 16

2.5 Equitable Mortgage 17

2.6 Creating Equitable Mortgages 17

2.7 Remedies of a mortgage. 19

2.7.1 Covenants to be implied in every mortgage. 19

2.7.2 Remedies upon breach of covenant 20

2.8 Remedies of an Equitable Mortgagee 24

CHAPTER THREE 26

NECESSITIES AND RIGHTS OF THE PARTIES INVOLVED IN MORTGAGE TRANSACTION IN

UGANDA 26

3.1 Risks involved with customary mortgages _______________ 26

3.2 Use of Customary Land as Security to acquire a Mortgage in Uganda 26

3.3 Registration mortgage under customary land 27

3.4 Remedies of mortgagee of customary land and tenancy by occupancy 28

3.5 Equity protection of a mortgagor 29

CHAPTER FOUR 33

FINDINGS 33

4.1 Impact of Mortgaging to Uganda's economy 33

CHAPTER FIVE 37

CONCLUSION AND RECOMMENDATIONS 37

5.1 Conclusion 37

5.2 Recommendations 38