I AM privileged to have visited recently two of Visayas’ entrepreneurial centers – Cebu City and Negros Occidental – in connection with the expansion of the Bangko Sentral ng Pilipinas’ microfinance flagship initiative – the Credit Surety Fund.

Cebu City, which forms part of Metro Cebu, has been recognized as the country’s second most important economic center — next only to Metro Manila.

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Aside from major businesses that have transformed Cebu City into a bustling metropolis, it is also the home of a broad range of world-class entrepreneurs.

The Cebuano entrepreneurs have carved a niche in the United States, supplying handbags, belts, toys, gift items, furniture and house wares to major department stores such as Marks and Spencer, DeLange, Debenhams, Target, Nordstrom, Top Shop and JC Penney, among others.

Negros Occidental, on the other hand, has traditionally been associated with sugar. But of late, the province is also becoming known for its delicious Inasal (barbecued marinated chicken) and delightful pastries such as guapple pie, piaya, barquillos, pinasugbo, pastel de mangga, panyo-panyo, butong-butong, dulce gatas, pastilles de durian and pili nuts. The province is also renowned for its finely-made pasalubong (keepsake) items, giftware and holiday décor.

The Cebuanos’ and Negrenses’ entrepreneurial qualities make them ideal participants in the Credit Surety Fund initiative, which aims to democratize small businessmen’s access to credit.

As we have discussed in previous articles, the Credit Surety Fund provides a credit enhancement mechanism which makes it more attractive for banks to lend to small and medium enterprises, which are otherwise handicapped because of inability to provide the collateral required by banks.

The Credit Surety Fund involves the partnership of the accredited and well-managed cooperatives, (composed of micro, small and medium
enterprises), the local government unit, donor institutions such as the Development Bank of the Philippines, Land Bank of the Philippines, other partners such as the Cooperative Development Authority and the IGLF. The Bangko Sentral provides the enabling environment for the establishment and growth of CSFs, including the rediscounting of CSF-backed loans.

To date, the Bangko Sentral ng Pilipinas has helped organize 11 Credit Surety Funds all over the country in just over a year.

The first two are in Cavite and Aurora provinces, both in Luzon; four are in Mindanao – in Compostela Valley, Davao del Norte, Davao Oriental and North Cotabato; while Visayas has five – in Bohol, Negros Oriental, Negros Occidental, Iloilo City, and now in Cebu City.

The objective, of course, is to eventually establish a Credit Surety Fund in all the provinces and major cities in the country.

DBP Chair Pat Sto. Tomas hails the CSF as an ‘out-of-the-box solution’ which allows MSMEs to overcome the problem of lack of collateral. Cebu City Mayor Tommy Osmena believes the CSF can provide the mechanism which will allow the poor to become millionaires.

As for Bangko Sentral ng Pilipinas, the Credit Surety Fund is part of an overall policy to provide an environment that promotes universal access to credit.

As BSP Governor Amando Tetangco Jr. puts it: “Credit that sustains economic activities that generate jobs throughout the country. Credit for big business. Credit for micro, small, and medium enterprises. And the under the MetroCebu CSF, credit that empowers deserving entrepreneurs who have no collaterals.”

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