BSP targets P1B in loans under credit guarantee program

BSP targets P1B in loans under credit guarantee program

CEBU CITY -- The Bangko Sentral ng Pilipinas (BSP) wants bank loans guaranteed by trust funds put up by cooperatives and local governments to rise to P1 billion by the end of 2012, a senior central bank official said on Friday.
"We target to reach around P1 billion in total loans under the Credit Surety Fund [program] by December 31, 2012," BSP Deputy Governor Diwa C. Guinigundo told reporters at the sidelines of the 2011 BSP Awards and Luncheon for Stakeholders in the Visayas Region on Friday.

The target, substantially higher than the P152 million recorded as of June 30, could be achieved by increasing the number of Credit Surety Funds (CSFs) across the country, Mr. Guinigundo said.

The establishment of CSFs, however, depends on the preparedness of cooperatives as well as support from local governments.

There are 16 CSFs are present. CSFs are set to be launched in Benguet, Oriental Mindoro, Palawan, Misamis Oriental and Baguio within the year.

The central bank spearheaded the creation of the Credit Surety Funds among cooperatives and local governments.

The program, which commenced in July 2008, involves the creation of a trust fund from the contributions of a participating cooperative and a counterpart from the provincial government.

The fund will be used to guarantee the bank loans of small businessmen, who normally would not have been able to do so as they lack collateral and credit records.

The central bank has committed to accept for rediscounting the loans granted under the CSF program.

Mr. Guinigundo encouraged banks and cooperatives to be more involved in the program. "This is a good program aimed at improving the credit worthiness of [micro, small and medium enterprises]," he said.

Under the program, cooperatives can pool a minimum of P100,000 and they can get loans that are "worth 10 times their contribution," Mr. Guinigundo added.

He explained: "Under a normal loan, their contributions or ’collateral’ would result in a loan that is a fraction of their pooled money. Under the credit surety fund, they get a multiple." -- Antonio Siegfrid O. Alegado

--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
------------------------------------------