The relationship between land tenure and access to credit

Shelter is a fundamental human need and even in the case of developing countries it is usually placed above education and health. But the continuous growth of the urban population puts pressure on individuals and businesses in so many ways which calls for the need for credit support. The Ghanaian culture places very high value on property ownership although just about five percent of the Ghanaian populace can develop their lands out of their own pockets. This brings in the need for credit and the long-standing argument by de Soto that poverty persists in Africa because of the defective nature of our land system hence a single approach of ownership was proposed. Ghana’s land system is funded on plurality and recognized as so with about 80% of the lands under customary arrangements: an arrangement de Soto did not consider. Does it mean credit should not be available in this case? The main objective of the research was therefore “to examine and explain the extent to which recognized land tenure systems or arrangements affect access to formal credit in Accra and Tamale”. In order to achieve this objection the main question of “how do the different recognized land tenure systems or arrangements mainly title, deeds, skin, and stool lands allow or enable access to formal credit in Accra and Tamale, Ghana?” was posed. Theoretically, de Soto’s theory was extensively discussed and related to other concepts such as land tenure, land registration, rights, and access to credit. A multiple case study approach was employed specifically Accra and Tamale and this was due to the existence of different tenure arrangements in the selected cities. Data collection was achieved through semi-structured interviews and desk research. By employing a purposive sampling technique, key personnel were interviewed online. Findings from the study showed that whiles there was recognition for various types of tenure, an individual could still access credit with any of the recognized tenures in Ghana. Although credit institutions preferred more formal arrangements, customary arrangements were also accepted mainly because of its dominance in the Ghanaian land tenure system. Recommendations proposed included building a more active and robust institutional and tenure framework that clearly defines and improves ownership security as this directly affects the confidence of credit institutions.