More MSMEs seen to benefit from fund

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Monday, August 18, 2014


MORE micro, small and medium enterprises (MSMEs) will get access to credit at a relatively lower cost or even without collateral after the Province of Cebu contributed P3 million to the Credit Surety Fund (CSF) program.

Last Friday, the Province of Cebu, led by Gov. Hilario Davide III, signed a memorandum agreement with the Bangko Sentral ng Pilipinas (BSP) to contribute P3 million to the fund.

With the contribution, the Cebu CSF now has P48.6 million. Cebu CSF is the largest CSF by far when it comes to total contribution.

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It was recently awarded by the Bangko Sentral ng Pilipinas (BSP) as Most Outstanding CSF of the Year.

BSP Deputy Governor for Monetary Stability Sector Diwa Guinigundo welcomed Cebu Province’s participation in the CSF saying it will advance the cause of MSME’s goal of economic empowerment.

Guinigundo said the increase in the amount of endorsable loans could benefit 50 to 100 more MSMEs, depending on the amount of the loan.

“If a small business can employ five workers, we are talking here of additional 250-500 people who can add to the number of employed, with purchasing power to help sustain the country’s economic growth targets,” said Guinigundo.

Recognizing the success of the Cebu CSF, Elsie Fe Tagupa, assistant vice president of the Land Bank of the Philippines (LBP), announced they are suggesting an additional P5 million contribution for Cebu CSF. Other partners like Development Bank of the Philippines (DBP) and Industrial Guarantee and Loan Fund (IGLF) pledged to continue looking for ways to help the Cebu CSF expand its coverage to further help more MSMEs.

The CSF Program was initiated by the BSP through its Department of Loans and Credit and was first launched in Cavite in 2008.

According to BSP 7 Director Demetrio Casipong, the program is “an innovative approach to making credit accessible to MSMEs to avail themselves of loan accommodations from banks with no collateral.”

The Cebu CSF was established through the pooling of contributions of cooperatives, Cebu City Government, LBP, DBP, and IGLF. It aims to increase the creditworthiness of MSMEs that are experiencing difficulty in obtaining loans due to lack of acceptable collateral, credit knowledge and credit track record.

In 2009, Cebu CSF’s total fund pool was P32.1 million. This amount increased in the five years of successful operations. As of June 30, the total fund, inclusive of earnings, reached P45.6 million, an increase of P13.5 million or 29.6 percent.

The total amount of approved loans reached P265 million, of which P173 million was released to 265 beneficiaries with an average loan of P668,000 each. The maximum amount that may be endorsed by the fund is P225 million. Its outstanding loans stood at P63.4 million.

Published in the Sun.Star Cebu newspaper on August 19, 2014.

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