Land tenure traceability technology
Land tenure traceability technology
Business Model Description
Create technology-based solutions for property formalization (e.g. land titling, building registration, successions, property purchase studies) to secure rights for long-term prosperity powered by real-time property assessment (picture, data collection, satellite data, ownership traceability), legal and technical analysis, case preparation and governmental transactions traceability.
Expected Impact
This initiative intends to reduce inequality in land tenure and land informality in rural areas.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
Sector Classification
Technology and Communications
Development need
>Only 42.56% of households in Colombia have a computers and/or tablets and around and 73% have a mobile phone (1).
Policy priority
> Modernization law of 2019 intends to modernize institutions and focalize investments to facilitate the deployment of high cost infrastructure in the ICT sector. Auctions of the connectivity expectrum have taken place (2)(3).
Gender inequalities and marginalization issues
>Only 6.11% of women work in the ICT sector, without growth over the last years (5).
Investment opportunities
>The IT sector is expected to grow with prospects for U.S. companies derived from the Trade Agreement (4).
Key bottlenecks
> The main bottlenecks and obstacles include rural connectivity infrastructure development and deployment, access to technology and devices and skill development among less educated population.
Technology
Development need
>Low penetration of technology in companies: internet of stuff (14,8%), robotics (11,1%), 3D printers (4,8%), virtual reality (1,7%), Big Data (16,8%) and AI (9,7%). Only 16% of large companies as of 2017 sold through digital channels. (7)
Policy priority
>Modernization law of 2019 intends to modernize institutions and focalize investments to facilitate the deployment of high cost infrastructure in the ICT sector. Auctions of the connectivity expectrum have taken place (2).
Gender inequalities and marginalization issues
>Only 6.11% of women work in the ICT sector, without growth over the last years (5).
Investment opportunities
>Micro commerce is the sector that is growing the fastest in digital adoption in Colombia (+37%) Digital transformation and efficient management through Big Data and AI, digital economy adoption, digital and mobile banking (6).
Key bottlenecks
>The main bottlenecks and obstacles include capex intensive connectivity development, transport infrastructure lags and low skills and adoption of technologies.
Software and IT Services
Pipeline Opportunity
Land tenure traceability technology
Create technology-based solutions for property formalization (e.g. land titling, building registration, successions, property purchase studies) to secure rights for long-term prosperity powered by real-time property assessment (picture, data collection, satellite data, ownership traceability), legal and technical analysis, case preparation and governmental transactions traceability.
Business Case
Market Size and Environment
> USD 1 billion
> Colombia has 48M Colombians of which 14M people (30%) live in rural areas. 12.4M of people lack of property rights (60% rural, 20% urban) (8); Suyo service charges US $1,500 for securing property rights, rendering a market size of around US$18bn market (9).
Indicative Return
10% - 15%
> 25%
> The Colombian multi purpose cadastre project credit awarded by the World Bank has an IRR of 14-15% (10).
> According to a couple of studies the return of investing in the formalizations of property rights can range somewhere in between 20-50% (11).
Investment Timeframe
Medium Term (5–10 years)
Accoring to local investors interviewed, their expected investment timeframe on land tenure traceability technology is around 4 to 7 years.
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Market - Highly Regulated
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
> 60% of rural and 15% of urban properties do not have formalized property rights, implying land tenure informality is one of the main difficulties in rural Colombia (13)
> US $2,500 is the estimated cost of securing right processes, which involves lawyers and negotiating complex government bureaucracy (14).
> 94% of the cadastre is outdated and 28% is without information, this translates into an informality in land tenure of 60% (15).
Gender & Marginalisation
> 26% of rural land productive activities are led by women, whereas the remaining 74% are men (16).
> Women have titles over only 26% of land in the country (19).
> 64% of rural households have no access to land (17).
Expected Development Outcome
> Drop financing rates between 8% and 17% for owning land and having psychosocial security, it is also a way to break intergenerational poverty traps.
> Increase credit rates approval by 12%, double property improvements and property values and reduce child labour by 28% (13).
> Formalize land tenure and increase access to land.
Gender & Marginalisation
> Reduce inequality in access to land for women and rural population, the goal of the National Development Plan is to benefit 12,142 women through access to land formalization (18).
Primary SDGs addressed
1.4.2 Proportion of total adult population with secure tenure rights to land, (a) with legally recognized documentation, and (b) who perceive their rights to land as secure, by sex and type of tenure
886538.6 ha of small and median size rural land formalized (30).
7000000 ha of small and median size rural land formalized by 2030 (30).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
Corporates
Planet
Outcome Risks
> A negative externality deriving from land formalization is the possibility of increasing land concentration and benefiting large land tenants, leaving behind vulnerable population.
>A possible outcome risk of land formalization is the potential inequalities among vulnerable population due to common propietary rights.
Impact Risks
External risk: > Even if there is a system that can track land tenure, property rights might not be secured due to land disputes, and violent displacements. > Drastic changes in the environment that are not accounted for such as earthquakes, tsunamis, and other natural disasters affecting connectivity infrastructure.
Execution risk: >Multipurpose cadastral system and related land and property tenure documents must be digitized and coincide un several databases, delaying the process.
Drop off risk: > Low legitimacy in the process could lead to communities not accepting land rights allocation.
Impact Classification
What
Positive and significant outcome due to benefits related to property and land tenure.
Risk
Failing to clear land tenure could resume armed conflict and create further inequality and poverty traps.
Impact Thesis
This initiative intends to reduce inequality in land tenure and land informality in rural areas.
Enabling Environment
Policy Environment
(Plan Nacional de Desarrollo (2018 – 2022)): Create the conditions for land tenure by increasing the titling of rural private property and properties that grant access to land by the State(20).
(Conpes 3958): outlines the strategy to implement a multipurpose cadastral system (21).
(Programa de la Formalización de la Propiedad rural): Develop a massive and participatory Land Sweep Procedure to support the clean-up of private property, patrimonial fiscal assets carried out by the Ministry of Agriculture (22).
Financial Environment
Financing incentives: The government secured a World Bank loan for US$100M to structure a multipurpose cadastral system, to strengthen security of tenure and facilitate access to property information (26). Banco Agrario offers a special credit line that includes land formalization expenses (28).
Other incentives: The government created the Campo con Progreso program, an alliance to develop and increase rural productivity (27).
Regulatory Environment
(Law 1561 of 2012): Established the process to grant property titles to the material possessor of urban and rural real estate (23)
(Ley Zidres, Law 1900 of 2018): Promote equity in access to the allocation of national vacant land, in the allocation of rural housing and the distribution of resources for productive projects (24)
(Law decree 902 of 2017): adopting measures to facilitate the implementation of the rural reform agreed upon in the Peace Agreement regarding land access and formalization (25).
Marketplace Participants
Private Sector
Suyo is a company currently using technology to aid Colombian families in the formalization process. Banks like Banco Agrario are awarding credits that incentivize land formalization.
Government
The national government is an important actor promoting fair access to land and formality carrying out efforts to formalize land.
Multilaterals
The World Bank awarded Colombia a loan for a multipurpose cadastral system.
Non-Profit
USAID is working with the Colombian government in the land formalization process.
Target Locations
References
- (1) MINTIC (2020) Indicadores básicos de TIC en los hogares. Accessed february 8th 2021
- (2) MINTIC (2019) ¿Qué es el Proyecto de Ley de Modernización del Sector TIC? Accessed february 8th 2021
- (3) Oxford Business Group (2020) - New ICT laws and attention to innovation increase Colombia's internet coverage. Accessed January 26 2021
- (4) International Trade Administration (2020) – Information and Communication Technology. Accessed January 26 2021
- (5) Semana (2018) Analítica de datos, una de las tecnologías con más futuro en el 2018. Accessed February 8th 2021
- (6) EMIS Insights (2020), Colombia ICT Sector Report 2021-2022
- (7) MINTIC (2018) Así usan la tecnología las mujeres en Colombia - Accessed February 8th 2021
- (8) BID (2018) – El 60 por ciento de los predios rurales no están formalizados. Accessed May 21st 2020
- (9) Portafolio (2018) - La tarea de formalizar la propiedad rural. Accessed june 5th 2020
- (10) World Bank (2019) Multipurpose Cadastre Project. Accessed February 8th 2021
- (11) Ceballos (2016) - Efectos de la formalización de la propiedad de la tierra en el desarrollo rural. Accessed May 21st 2020 (link)
- (12) Landlinks (n.d.) Mast Technology. Accessed February 8th 2021
- (13) BID (2018) – El 60 por ciento de los predios rurales no están formalizados. Accessed May 21st 2020
- (14) FastCompany (2015) - This Startup Is Making It Easier For People Living In Slums To Own Their Land. Accessed may 22nd 2020
- (15) Caracol (2020) - El 94% del catastro en el país está desactualizado. Accessed August 15th 2020 (link)
- (16) Sicelo (2018) -Equidad de género en la tenencia y control de la tierra en Colombia: llamado a una acción emancipatoria. Accessed February 8th 2020
- (18) El Tiempo (2016) - El 64 % de hogares rurales no cuentan con acceso a la tierra. Accessed february 8th 2020.
- (18) Minagricultura (2019) - Plan Nacional de Desarrollo incluye metas de acceso a tierras, financiamiento y productividad para empoderar a la mujer rural. Accessed february 8th 2020.
- (19) Cinep (2018) Informe Mujeres rurales en Colombia - Informe Mujeres rurales en Colombia. Accessed February 8th 2020 "20) DNP (2017) - Plan Nacional de Desarrollo (2018 – 2022). "
- (21) DNP (2019) – Documento Conpes 3958. Accessed June 6th 2020
- (22) MinAgricutura (2019) – Programa de formalización de la propiedad rural. Accessed June 4th 2020
- (23) Secretaría del Senado (2012) Ley 1561. Accessed June 2nd 2020
- (24) USEmbassy (2020) – estados Unidos Apoya el programa “Nuestra Tierra Prospera”. Accessed Aug 15th 2020
- (25) Decree Law 902 of 2017 Colombia
- (26) BID (2019) - El catastro multipropósito será una realidad en Colombia con el apoyo del Banco Mundial. Aceessed June 6th 2020
- (27) DNP (2019) Campo con progreso. Accessed February 8th 2020.
- (28) Banco Agrario (n.d.) Línea Especial de Crédito con tasa subsidiada para compra de tierras para uso agropecuario. Accessed February 8th 2021
- (29) El Heraldo (2016) La solución para el problema de titulación rural que propone el Acuerdo. Accessed February 8th 2020.
- (30) DNP (2018) Objetivos de desarrollo sostenible. Accessed February 8th 2021.