Financial Adviser
Cebu coopreneurs get first shot at BSP loan
Entrepreneur-members of 16 Metro Cebu cooperatives will be among the first beneficiaries of loans from a Bangko Sentral ng Pilipinas program for micro, small- and medium-sized enterprises (MSMEs).
The Credit Surety Fund (CSF) will be used as surety cover for the loans of MSMEs from banks instead of hard collateral. Banks will also offer lower interest rates to beneficiaries.
According to a Bangko Sentral statement, the CSF program is part of the government's support for MSMEs. These businesses often find themselves hard pressed obtaining loans from financial institutions due to lack of acceptable collateral, unstable income, lack of business experience, and low paying capacity.
Former BSP vice governor Andres Rustia, in recent forum, listed guidelines on how to avail of a loan through the CSF program.
An entrepreneur applying for a CSF loan has to be a cooperative member with an initial deposit equivalent to 10 percent of his desired loan amount.
His loan application will be submitted by the cooperative representative to any member bank for approval.
If the loan is approved, the bank will notify the sponsor-cooperative for the submission of a letter of joint suretyship, which will be issued through a resolution by the board of directors of the sponsor-cooperative.
The bank will release the loan to the applicant after it receives the letter from the sponsor-cooperative.
The CSF program derives its funds from the pooled contributions of cooperatives and the counterpart contributions of the city government and donor institutions.
Members of the cooperatives have already made P12.1 million in contributions to the Metro Cebu Coopreneurs Surety Fund (MCCSF), the CSF’s cooperative component.
Cebu City Mayor Tomas Osmeña, in a statement, assured the cooperatives that the city would match their contributions. The Development Bank of the Philippines, the Land Bank of the Philippines and the Industrial Guarantee and Loan Fund have also committed to augment the fund.
According to the BSP statement, the banking sector in Cebu welcomed the CSF program because its “assurance feature” allows creditor banks to be paid promptly in cases of loan defaults.
Local government units will also benefit from the increased economic activities, additional taxes and the creation of more job opportunities with the opening of business ventures in their area.
The 16 cooperatives that will have the first shot at the CSF program are the Bacayan Multi-Purpose Cooperative, Bayanihan Multi-Purpose Cooperative, Catmon Community Multi-Purpose Cooperative, Cebu Peoples MPC, Cebu Market Vendors Development Cooperative, Central Visayas Government Employees MPC, CTPL Multi-Purpose Cooperative, Energizer Credit Cooperative, Mandaue City Public Market Vendors Multi-Purpose Cooperative, Mehitabel Employees Multi-Purpose Cooperative, National Confederation of Credit Cooperative, New Generation Network Multi-Purpose Cooperative, Osmeña Manalili Multi-Purpose Cooperative , Pagtambayayong Foundation, Inc., Sibonga Multi-Purpose Cooperative, and Society of Realty Firms Credit Cooperative.
The MCCSF will be launched today by the Bangko Sentral and the Cebu City government at the Marco Polo Plaza Hotel in barangay Apas, Cebu City.
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