Kampala — President Yoweri Museveni has advised banks in Uganda to refrain from the practice of asking for land titles as security from credit seekers saying the practice hinders economic growth.

"Our banks have been unaware about export financing/trade financing. Ugandan banks are still asking for land titles to give people loans.

Land titles are for small things like chicken, goat and pig rearing. We need big loans to expand our businesses so that we make profits from the products we are producing," he said.

He was speaking at the 15th Annual General Meeting of the African Export-Import Bank (AFREIMBANK) shareholders at the Commonwealth Resort Munyonyo recently.

Mr Museveni cautioned that a $10 million line of credit that has been signed between AFREIMBANK and the Uganda Development Bank, meant for long term loans for the business community in the export and import business should not be pegged on land titles. "Where are you going to get the land little for $100million loan? There are no land titles in this country worth $100 million or $500million loans that people need from banks therefore banks should not be asking for land titles to qualify one for credit," Mr Museveni said.

Although Uganda has 21 commercial banks and one development bank, there are growing concerns that these institutions do not readily avail credit to Small and Medium Enterprises (SMEs) and, especially to the agricultural sector.

Although microfinance institutions have expanded vigorously in many African countries, the size of their credit remains limited, and also the interest rate on micro credits is very high, due to the large administrative costs in relation to their scale of operation.

Mr Museveni also called on his fellow African leaders to focus on entrenching trade across the continent to boost the continent's trade. He noted that inadequate infrastructure and low level of productivity have held back trade activities in Africa for a long time and two things need to be done immediately; build energy and transport infrastructure. He said that in the last 50 years, no new railway has been built on the continent except the one which was built by the Chinese in Tanzania.