Tacloban, Mandaue surety funds launched

THE BANGKO SENTRAL ng Pilipinas (BSP) has opened two more credit surety funds (CSF) in the Visayas region — bringing the country’s total CSFs to 48 — in a bid to boost small businesses growth as well as provide career opportunities to Filipinos.

In a statement e-mailed to reporters on Wednesday, the central bank announced it officially launched two additional CSFs in the cities of Tacloban and Mandaue.

The Tacloban facility would have eight cooperatives while 15 cooperatives joined the facility in Mandaue. Their respective city governments have infused capital into the CSFs.

Meanwhile, local government units and state-run agencies, namely the Industrial Guarantee and Loan Fund, the Development Bank of the Philippines, and the Land Bank of the Philippines, will also pour in funds to the two CSF facilities, which may be in the form of grants or investments.

The CSF Act of 2015 or Republic Act 10744 was signed on Feb. 6, authorizing the BSP to extend formal sources of credit to “unbankable” micro, small and medium-sized enterprises (MSME). Republic Act 10744 institutionalizes the CSF program pioneered by the central bank in 2008.

The central bank signed the implementing rules and regulations (IRR) of RA 10744 was signed on June 20 this year that would streamline the process of setting up credit facilities for MSMEs nationwide.

During the singing of the IRR, outgoing BSP Governor Amando M. Tetangco, Jr. had said they are eyeing to open six new CSFs this 2017, the first of which was launched in San Fernando City in La Union in June.

The central bank’s CSF program organizes small firms into cooperatives, which in turn will serve as guarantor for its member-groups in seeking credit lines.

Under the scheme, MSMEs pool their cash into one collective fund which will then be accepted by banks as collateral. A firm can incur a loan worth as much as 10 times the amount which they poured into the surety fund, with a minimum placement of P100,000.

As of April, loans amounting to P3.25 billion have been released to 16,360 beneficiaries. There are CSFs in 31 provinces and 17 cities in the country. —