The central bank has partnered with the provincial government of Nueva Vizcaya in launching the Credit Surety Fund (CSF) to help cooperatives and micro, small and medium enterprises (MSMEs) in the province gain easier access to bank credit, even without collateral.
In a statement released on Tuesday, the Bangko Sentral ng Pilipinas (BSP) said the provincial government of Nueva Vizcaya pledged to contribute P2 million to the CSF.
Meanwhile, 10 cooperatives in the province committed a further P4.2 million to the fund, it said.
“The Industrial Guarantee and Loan Fund, Development Bank of the Philippines and Land Bank of the Philippines, the partner institutions of the CSF have also expressed strong support to the CSF Program with their respective contributions to further augment the fund,” the BSP stated.
Recently, the central bank said it expects loans made by MSMEs under the CSF to reach the P1.5 billion mark this year as the number of local governments which tap the program continues to rise.
As of September this year, loans made under the program have reached P1.3 billion, benefiting 10,442 MSMEs nationwide. In 2013, total loans extended under the CSF amounted to P1.069 billion, up from the P615.6 million in 2012.
Now on its sixth year, the CSF program has been established in 37 local governments nationwide.
CSF is a public-private partnership that links the key players of the economy into a unified purpose of empowering the MSME sector. It is a trust fund set up by pooling contributions from participating cooperatives, local government units, and other partner institutions.
The MSMEs that obtain loans from banks through the CSF are expected to benefit from lower interest rates compared with those charged by private lending investors or loan sharks.
The CSF Program also provides training to enhance the capabilities of participating cooperatives and the MSMEs in the areas of financial and risk management, entrepreneurship and business management and credit appraisal and monitoring.