Land Admin SystemsSummary
Draft for Ken's approval
In developed countries, titles are routinely used as collateral. In developing economies, banks' concerns about Title Quality often stand in the way. Senior Provincial Government officials used the Strategy Dynamics approach to understand the system before approaching banks. They developed a high level schematic of the core structure covering the Land Registry, the banking system and the links between them.
Four scenarios on Title Quality and bank lending were compared with a base case in which banks do not accept titles. When banks lend against titles and Land Registries keep standards high, substantial capital can be generated. But the system is highly sensitive. If registries become overstretched and quality drops, delays grow, confidence falls and banks may withdraw, halting the flow of capital.
Evidence from Europe and Central Asia shows registration reforms can increase mortgage activity and investment, though results are not guaranteed. The top priority is keeping title quality high over long periods. That takes coordination between agencies, adequate funding, engagement with banks and safeguards for consumers.
Key points
- In developed countries, titles are routinely used as collateral to raise significant amounts of development capital.
- Evidence, mainly from land projects in Europe and Central Asia, shows titles can raise capital in developing countries, but this is not automatic.
- The Strategy Dynamics approach helped Provincial Government officials understand the system and the key issues before they approached banks.
- It is vital to keep, over decades, the very high rating for Quality of Title that banks require before they accept titles as collateral.
- The Land Registry and the other agencies responsible for parts of Quality of Title must each hold their quality targets over decades.