LA TRINIDAD, Benguet -- The Bangko Sentral ng Pilipinas signed a memorandum of agreement with the provincial government of Benguet, various cooperatives, non-government organizations and donor institutions for the creation of Credit Surety Fund to help small entrepreneurs secure collateral free loans from banks.
BSP Assistant Governor Maria Cyd N. Tuaño-Amador and Benguet Gov. Nestor Fongwan with heads of cooperatives and non-government organizations in the province inked the MOA creating the Benguet Credit Surety Fund (BCSF) at the Benguet capitol last week.
According to Amador, the CSF aims to facilitate the flow of credit particularly in the countryside by allowing cooperatives to borrow from banks even without collateral.
It is a credit guarantee system created by pooling together the contributions from participating cooperatives and the local government unit, which must at least match the cooperatives’ contribution.
“We need to ensure that small businesses are able to grow because they hold the most promise in delivering the fruits of development and spreading the benefits more widely,” said Amador. “Not only do small businesses provide income for the entrepreneurs themselves, they also benefit their communities through job creation and economic activity expansion.”
Seventeen cooperatives and NGOs from Benguet have committed to join the BCSF with pledges totaling P5 million in contributions.
Fongwan also assured the cooperatives of his full support and promised to contribute an equal amount to the fund.
The combined contributions of the cooperatives and foundations have the capacity to guaranty loans of up to ten times, or a total of P50 million, at any given time.
The Development Bank of the Philippines, Land Bank of the Philippines and the Industrial Guarantee and Loan Fund have all expressed strong support for the program with pledges of contributions to augment the fund.
Aside from opening new windows for financing, through the CSF the participating cooperatives and their member micro, small and medium enterprises (MSMEs) will also benefit from current trends in loan management via the training component added by the BSP in the program.
Also present during the MOA signing were Development Bank of the Philippines President Francisco del Rosario Jr., Land Bank of the Philippines President Gilda E. Pico and Industrial Guarantee and Loan Fund chief executive officer Benedicto Ernesto R. Bitonio Jr., a lawyer.
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