THE Bangko Sentral ng Pilipinas (BSP) launched on Tuesday yet another credit surety fund (CSF) to speed up its campaign of financial inclusion.
In a statement, the central bank said the Nueva Vizcaya CSF was launched in the interest of micro-, small- and medium-scale entrepreneurs (MSMEs) in the area.
This was the 33rd CSF in the country since the program’s inception in 2008.
The CSF is a program the BSP initiated as a credit-enhancement mechanism to help small borrowers, whether businesses or households, obtain loans from banks at competitive rates.
Since MSMEs typically experience difficulty in getting bank loans due to lack of acceptable collateral, credit knowledge and credit track record, the CSF helps by pooling cash contributions from participating institutions and use this as a surety cover or guarantee.
“The CSF aims to help cooperatives and micro, small and medium enterprises gain easier access to credit facilities of banks at relatively lower costs, even without collaterals,” the BSP said.
Among the partner institutions of the surety fund in the area include the provincial government, the Industrial Guarantee and Loan Fund (IGLF), the Land Bank of the Philippines and the Development Bank of the Philippines (DBP).
Latest data from the BSP show 10 participating credit cooperatives committing P4.3 million to the fund. The provincial government of Nueva Vizcaya, meanwhile, pledged to contribute P2 million.
The IGLF, DBP and LandBank also vowed continued support and to further augment the CSF.
“The CSF also provides training program, which aims to enhance the capabilities of the participating cooperatives and MSMEs in the areas of financial and risk management, entrepreneurship and business management and credit appraisal and monitoring,” the central bank added.
The BSP’s financial-inclusion program has been recently recognized by The Economist Intelligence Unit as the best program in the region and the third best in the world this year.