THE Bangko Sentral ng Pilipinas (BSP) yesterday launched the Mandaue Credit Surety Fund (MCSF) to provide loans to micro, small and medium enterprises (MSMEs) at low interest rates.
BSP deputy governor Diwa C. Guinigundo said the MCSF is the 48th credit surety fund (CSF) in the country. The first CSF was organized in 2008 in Cavite City, followed by the Cebu Credit Surety Fund in the same year to help the government attain inclusive economic growth.
Gunigundo said the CSF is intended to support the establishment, expansion and continued viability of MSMEs by providing them with greater access to bank loans without the need for traditional collateral and excellent credit prestige.
A credit enhancement scheme developed by the BSP, the CSF serves as a security for loans of MSMEs by providing a surety cover in lieu of acceptable collaterals, according to the BSP’s primer on the CSF.
A surety cover is an agreement executed by the CSF in favor of the lending bank, “whereby the surety obligates itself to be jointly and severally liable with the borrower in the event that the latter defaults,” the primer said.
Mandaue City Mayor Luigi Quisumbing said his government decided to put an initial P3 million into the MCSF because they believe cooperatives and MSMEs have high level of knowledge in implementing livelihood projects.
Quisumbing said this program under the BSP is one of the most important economic initiatives that will be able to spark the development of the country.
He said this program seeks to close the gap between the creativity and ability of Mandauehanon cooperatives and the access to capital in the financial sector.
Aurora C. Maghirang, senior assistant vice president of the Development Bank of the Philippines, said they had released P1.04 billion in loans to MSMEs, which had improved their living conditions.
Gary Maningo of BSP said one of the important components of the CSF is the participation of the local government unit (LGU).
“In fact, there is no CSF to speak of without the support and participation of the LGU. And we are very fortunate and thankful that the City of Mandaue has pledged and sealed its commitments to fully support the CSF program,” Maningo said.