THE Bangko Sentral ng Pilipinas (BSP) is eyeing to establish 6 additional credit surety fund (CSF) cooperatives this year in line with the vision to support more micro, small and medium enterprise (MSMEs).
“Our target is around 6 CSFs for this year. Our objective is to expand the range of CSFs to develop a more inclusive financial system that promotes inclusive growth, particularly in the areas that do not have sufficient support for MSME and non-government organization (NGO) development,” BSP outgoing Gov. Amando
Tetangco Jr. said in a speech during the signing ceremony of the implementing rules and regulations (IRR) of the CSF Act of 2015.
The BSP has recently established a CSF cooperative in La Union. It also intends to open CSF cooperatives in Tacloban, Leyte; Mandaue City; Sta. Rosa, Laguna; Dinagat Islands; and Batangas.
“This milestone attest to the power of partnerships among agencies to pursue development objectives. In particular, to foster the organization of credit surety fund cooperatives to manage and administer surety funds that will enhance access to bank credit of MSMEs and non-government organizations in the country,” Tetangco said.
Also present during the signing ceremony were officials of the Department of Finance and the Cooperative Development Authority, as well as Sen. Bam Aquino.
The CSF is a fund generated from contributions of well-capitalized and well-managed member-cooperatives and NGOs, local government units (LGUs), government financial institutions and other institutions and government agencies.
It serves as a surety fund for loans of qualified MSME borrowers, in lieu of hard collaterals. It is designed to provide MSMEs with access to credit, enhancing their sustainability and growth.
“CSFs have proven effective in ensuring shared and inclusive growth. An impact survey conducted in 2014 and 2015 indicated that credit obtained through CSFs by MSMEs allow them to increase their average number of employees by 30 percent, their sales by 26 percent, and their monthly profit by 41 percent,” Tetangco said.
“Likewise, LGU revenues increased by 37 percent of access increase. Indeed the impact of this both compelling and inspiring. We have come a long way since we began this initiative since 2008,” he added.
The CSF Act provides a reliable platform for unbanked and underbanked MSMEs to access credit and achieve financial objectives.
BSP Deputy Gov. Diwa Guinigundo said the central bank is expecting more MSMEs to join the program.
“For example, five cooperatives are onboard before the actual signing, but two or three more will come onboard and they have their own programs,” Guinigundo said.
“Ito talaga ang essence of what we need to do in terms of helping MSMEs. Because what’s really lacking is the money. It’s not the medium,” he added.
To date, BSP data showed 46 CSFs have been established in 30 provinces and 15 cities with a total of P3.5 billion in approved loans of which P3.2 billion was released in favor of 16,356 beneficiaries in various industries.