MORE small businesses gained access to capital in the past year as a result of guarantee funds set up by the Bangko Sentral ng Pilipinas (BSP).
The growth in the amount of loans backed by credit surety funds (CSF), while still minute relative to all outstanding credits in the country, provided more evidence of the success of the BSP’s efforts to support entrepreneurs.
Credit surety funds are “expected to spur economic activities,” the BSP said, leading to higher incomes, “more job opportunities, and countryside development.”
In a statement on Monday, the BSP said approved loans backed by CSFs reached P1.74 billion at the end of May this year, rising from P1.3 billion in September last year. Of the total approved loans, P1.47 billion has been released.
The CSF is a credit enhancement scheme that allows micro, small and medium enterprises (MSMEs), which are members of cooperatives, to borrow from banks using the CSF surety cover as security for the loan in lieu of conventional collateral.
Loans granted by banks under the program are eligible for rediscounting with the BSP.
The report on the increase in CSF-backed loans came as the BSP readied the launch of the Cagayan CSF in Tuguegarao City. The Cagayan CSF is the 39th guarantee fund in the country.
A total of 12 cooperatives initially signified their intention to join the Cagayan CSF by contributing an aggregate amount of P1.35 million while the provincial government of Cagayan initially pledged P5 million.
The most recent CSF that joined the growing CSF movement across the country was the Zambales CSF which was launched on July 13. Five more CSFs are scheduled to be established in 2015; in Nueva Ecija; the cities of Malaybalay and Valencia, both in the province of Bukidnon, and in Santiago and Cabanatuan in Nueva Ecija. Paolo G. Montecillo