BANGKO Sentral ng Pilipinas will put up five more credit surety funds within the year in the provinces to further widen their coverage nationwide and assist more micro-enterprises that cannot secure bank loans due to lack of acceptable collaterals, credit knowledge and credit history.
Bangko Sentral Governor Amando Tetangco Jr., Finance Secretary Carlos Dominguez III and Cooperative Development Authority chairman Orlando Ravanera on Tuesday signed the implementing rules and regulations of Credit Surety Fund Cooperative Act of 2015.
At the sidelines of the signing, Deputy Governor Diwa Guinigundo said the additional credit facilities would be located in Tacloban City, Mandaue in Cebu, Sta. Rosa in Laguna, Dinagat Island in Surigao and Batangas.
“We now have the Act that provides a legal personality. So there will be no problem with regards to the contributions of the local governments which, before, were subjected to auditing. With the signing of the IRR, the law institutionalized the credit surety funds,” Guinigundo said.
Bangko Sentral on June 14, 2017 put up the La Union Credit Surety Fund, making it the 46th facility in the country and the 25th in Luzon.
The CSF is Bangko Sentral’s financial inclusion initiative to improve the credit worthiness of small businesses that cannot secure bank loans due to lack of acceptable collaterals, credit knowledge and credit history.
Latest data showed that as of March 31, 2017, the cumulative loan releases by banks covered by the CSF amounted to P3.2 billion, benefitting 16,356 MSMEs.
Aside from credit management, the other major component of CSF is the capability enhancement program which aims to strengthen the skills of cooperatives and their member-MSMEs in the areas of credit, management and finance to ensure the success and sustainability of the program.
At the height of the election campaign early last year, Bangko Sentral decided to suspend the establishment of CSF to spare them from politics.
CSF is a fund generated by the pooling of contributions of well-capitalized and well-managed cooperatives and non-government organizations, local government units and partner institutions such as the Industrial Guarantee and Loan Fund, Development Bank of the Philippines and Land Bank of the Philippines.
The CSF program is a public-private partnership which links the key players of the economy into a unified purpose of empowering the MSME sector.
MSMEs account for more than 99 percent of all establishments in the country and 66 percent of total employment in the private sector.
