THE Bangko Sentral ng Pilipinas (BSP) and the Digos City government in Davao del Sur province on Monday signed an agreement launching the country’s 52nd Credit Surety Fund (CSF) there to support micro, small, and medium enterprises (MSMEs) in the area.
In a statement, the BSP said “10 ‘well-managed’ and ‘well-capitalized’ cooperatives contributed an aggregate amount of P2 million and,” while the city government “pledged P2 million to the fund.”
Land Bank of the Philippines, Development Bank of the Philippines, and the Industrial Guarantee and Loan Fund are expected to contribute to the new CSF, it added.
Established in August 2008, the CSF is a credit-enhancement program for MSMEs that cannot access bank credit because they lack hard collateral and credit histories.
It pools monetary contributions from cooperatives, non-government organizations, local government units, and partner-institutions.
It also serves as alternative security in lieu of the hard collateral that banks require, thus helping capital-short enterprises with viable business plans to secure financing.
Besides “providing surety to MSME loans, the CSF will equip the participating cooperatives and their MSME-members with added skills and knowledge in credit appraisal and monitoring, financial and risk management, entrepreneurship, and business management, among others, through technical assistance, such as trainings and seminars,” the central bank said.
As of end-April, loans released under CSF hit P4.68 billion. More than16,000 MSMEs benefiting from the initiative.
The fund is now in 32 provinces and 20 cities nationwide.