The Credit Surety Fund (CSF) Program of the Bangko Sentral ng Pilipinas (BSP) has made another considerable milestone in Dinagat Island Province after cooperatives, capital-short businessmen and micro small and medium enterprises (MSMEs) call for the establishment of the program in the province, the first in CARAGA Administrative Region.
BSP Monetary Board Member V. Bruce J. Tolentino and Dinagat Island Provincial Governor Glenda Ecleo will spearhead the signing of the Memorandum of Agreement among the stakeholders to establish the Dinagat Island CSF. This will be held on September 11, 2018, 10:00 a.m., at the Provincial Guest Center, Capitol Compound, Cuarinta, San Jose, Dinagat Islands.
Initiated by BSP in August 2008, the Credit Surety Fund Program is a credit enhancement scheme designed to increase the creditworthiness of cooperatives, businessmen and micro, small and medium enterprises (MSMEs) that are encountering difficulties in getting access to bank credit due to lack of acceptable collaterals and credit information. It is created by the pooling of cash contributions from participating cooperatives, local government units and partner institutions, which will then serve as security for loans extended by banks to MSMEs in lieu of acceptable collaterals.
The passage of Republic Act 10744 (or the CSF Cooperative Act) in 2016 institutionalized the Credit Surety Fund Program, granting the CSF a separate juridical personality as a special type of cooperative. Under this law, CSF Cooperatives will be regulated and supervised by the Cooperative Development Authority, being the country’s statutory regulator of cooperatives.
As of 28 August 2018, 16 cooperatives pledged to contribute an aggregate amount of P2.1 million to the Dinagat Islands CSF, while the provincial government has initially pledged P3.0 million. Development Bank of the Philippines and Land Bank of the Philippines are also expected to put up their counterpart contributions to the Dinagat Island CSF. Through this program, the participating cooperatives and their MSME members with viable business plans can obtain loans from banks even without collaterals. This will usher in more economic activities and will create more job opportunities that translate to increase in household income.
Two more CSFs are expected to be launched before the year ends. These are the CSFs in the Province of Ifugao and in the City of Tacurong, Sultan Kudarat.
Now on its 10th year, the CSF Program has been established in 32 provinces and 20 cities nationwide.