BSP to boost lending program for MSMEs

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) is boosting the industry’s lending program for micro, small and medium enterprises (MSMEs) as well as its financial literacy program particularly for beneficiaries of remittances from Filipinos abroad.

BSP Governor Amando Tetangco Jr. is set to lead the launching of the Credit Surety Fund (CSF) program in the province of Capiz on Tuesday, bringing to 21 the number of CSF nationwide.

Initiated in August 2008, the CSF is a fund created through the pooling of cash contributions from participating cooperatives with an equivalent counterpart contribution from the local government unit and donations from partner institutions. 

In lieu of acceptable collaterals, the fund would serve as guarantee for loans extended by banking institutions to MSMEs participating in the program.

The innovative credit enhancement program is aimed at meeting the financing requirements of enterprising cooperatives and capital-short businessmen who often experience difficulty in obtaining loans from banks due to lack of collaterals and credit track records. 

Under the CSF Program, a formal source of credit may now be accessed even in the absence of acceptable collaterals by way of a surety cover issued by the CSF in favor of the lending bank.

Now on its fourth year of implementation, the CSF Program has been institutionalized in 16 provinces and four cities nationwide.

A total of 20 cooperatives were gathered to participate in the Capiz CSF resulting in an aggregate contribution of P7 million to the fund. The Provincial Government of Capiz committed P8 million to the fund and the Municipal Government of Panitan, Capiz chipped in another P500,000.

The program aims to assist the entrepreneurs through a liberalized form of credit and to emancipate MSMEs from excessive financing costs charged by usurious lenders.

The establishment of the CSF in the seafood capital of the Philippines is expected to spur economic activities geared towards increased income, more job opportunities and a robust countryside development in the province of Capiz.

On the other hand, the BSP is set to conduct seven more Economic and Financial Learning Program (BSP-EFLP) campaigns in various cities in Luzon, Visayas, and Mindanao for the rest of year.

Specifically, an EFLP is set to conducted in Roxas City this week.

The BSP-EFLP consolidates the outreach educational activities of the BSP under one flagship program. It consists of a series of learning sessions and activities which aim to promote greater awareness and understanding of essential economic and financial issues.

This is expected to help the people make wise financial decisions.

The BSP-EFLP also embodies the goal of the BSP to promote economic and financial education among its stakeholders, who can then be its more effective partners in maintaining the effectiveness of monetary policy as well as in ensuring a stronger and safer banking and payments system.