CSF Caravan goes to Negros Occidental
The Credit Surety Fund caravan will have its next pit stop in Negros Occidental as the Bangko Sentral ng Pilipinas (BSP) and the Provincial Government of Negros Occidental formally launch the Negros Coopreneurs Surety Fund (NCSF) tomorrow, 22 September 2009, 3:00 p.m., at the L’ Fisher Hotel in Bacolod City. BSP Deputy Governor Armando L. Suratos and Negros Occidental Governor Isidro P. Zayco will lead the officials of participating cooperatives and donor institutions in the signing of the Memorandum of Agreement that will formally create the NCSF.
The BSP developed the CSF program in line with its overall thrust to increase the flow of credit in the countryside and in recognition of the significant role of micro, small and medium enterprises (MSMEs) as the drivers of the Philippine economy.
Reports from the Department of Trade and Industry hail MSMEs as the backbone of the Philippine economy as they comprise 99.6% of total registered firms and employ about 70% of the Philippine labor force. MSMEs, however, contribute a measly 32% to the economy due to difficulty in securing credit from financial institutions. This sad plight of the MSME sector is what the CSF intends to address.
The CSF will serve as a credit enhancement mechanism for MSMEs who are members of cooperatives to be able to access formal credit sources, i.e., from banks. It is a fund created from contributions by well-capitalized and well-managed cooperatives and counterpart contributions from the provincial government and donor institutions. The fund will be used to provide surety cover that will serve as collateral to guarantee the loans of MSMEs from banking institutions. The banking sector welcomed this novel way of providing credit to MSMEs and has pledged full support for the program.
The program will provide small businessmen with a much needed boost and is expected to perk up lending activities in the province. It is also expected to invigorate business and economic activities, generate employment and increase the local government’s revenues.