Small biz can secure financing from banks via CSF cooperative

MANILA – Small businesses now have greater chances to securing funding from banks once they become part of a cooperative accredited by the Credit Surety Fund (CSF).

Cooperative Development Authority (CDA) senior cooperative development specialist and head of CSF Section of CDA National Capital Region (NCR) Sergio Herrero Jr. cited the importance of CSF cooperative during the Laging Handa public briefing on Monday.

Herrero said CSF cooperative was created by virtue of Republic Act (RA) 10744 to aid micro, small and medium enterprises (SMEs), small cooperatives and non-government organizations (NGOs) secure financing through a surety cover to be provided by pooled funds from the banks, local government units (LGUs) and large and well-managed cooperatives.

He said CDA is now conducting a series of events to educate LGUs and other stakeholders on how the CDA will accredit cooperatives per locality that will help small businesses in their respective areas.

Herrero said this measure will help small businesses recover from the impact of the pandemic since it will allow them to have cover for the loans that they will secure from the banks for capital.

“Ang ibig sabihin, parang kolateral ito sa bangko para mapahiram po sila kaagad ng kaagarang puhunan na kakailanganin nila. Pero kailangan muna siyang pumasa sa qualification (This will serve as a collateral to the bank so that they can immediately get the funds they need. But they need to pass the qualifications first),” he added.

Under the law, Herrero said a small business can secure up to 10 times the amount it has shared in the cooperative.

But if it is not able to secure an endorsement, the CSF will provide up to five times cover so that a bank will extend a loan to a small business, he said.

Aside from securing a sure financing, Herrero said a cooperative accredited by the CDA for the CSF will have tax exemption, which will then benefit its members.

He said there are two qualifications that cooperatives must have to become part of CSF cooperative –well capitalized and well-managed.

Herrero said cooperatives must have certificate of compliance. ■