MANILA, Philippines - The Bangko Sentral ng Pilipinas is set to launch a facility in Aklan that will help grant collateral for micro, small and medium enterprises applying for loans.
In a statement, the central bank said the Aklan Credit Surety Fund (CSF) would be launched on Sept. 27 at the Sampaguita Gardens Resort in New Washington in Aklan.
“The CSF in the Province of Aklan is expected to spur economic activities geared towards creating more job opportunities that translate to an increase in household income,†the BSP said.
The facility pools cash contributions from cooperatives, local government institutions and other partner organizations. The funds would then serve as security for borrowings extended by banks to the member MSMEs.
“The CSF ensures payment of the indebtedness through the issuance of a surety cover that allows cooperatives and capital-short businessmen to obtain loans from banks even in the absence of hard collaterals,†the BSP stressed.
There are currently 16 cooperatives who pledged an aggregate amount of P2.8 million for the Aklan CSF, while the provincial government of Aklan initially committed P3 million.
The BSP said stakeholders are now optimistic more MSMEs in need of financial help would benefit from the Aklan CSF.
The facility, first launched by the central bank in August 2008, has already been insitutionalized in 20 provinces and seven cities nationwide, the central bank said.
As of end July, total accumulated loans approved under CSF programs nationwide summed up to P747 million, of which P577 million have already been released.
The BSP aims to have P1-billion worth of total loans approved under the program by end of 2013.