• By The Financial District


The Bangko Sentral ng Pilipinas (BSP) and the Cooperative Development Authority (CDA) have entered into a Memorandum of Agreement formalizing their cooperation arrangements for the effective implementation of Republic Act (RA) No. 10744 or the “Credit Surety Fund (CSF) Cooperative Act of 2015.”

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“The BSP is committed to support the development of the CSF as a vital credit infrastructure for sustainable MSME financing. Our partnership with the Cooperative Development Authority aims to harness collaborative efforts toward our shared goal of empowering cooperatives and MSMEs through the CSF,” said BSP Governor Benjamin E. Diokno.

The CSF is a credit enhancement mechanism designed to address the challenges of the micro-, small, and medium enterprises (MSMEs) and their cooperatives in accessing bank financing due to lack of collateral and credit history.

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Managed and administered by a CSF cooperative, the CSF fund is generated primarily from the contributions of well-capitalized cooperatives and local government units (LGU), as well as government financial institutions such as the Development Bank of the Philippines, Land Bank of the Philippines and the Philippine Guarantee Corporation.

The CSF serves as a security in lieu of hard collateral for loans extended to qualified cooperative and MSME borrowers. By providing cooperatives and MSMEs with greater financing opportunities, the CSF is envisioned to support the MSMEs in becoming more valuable contributors to economic development and job generation in their local communities. To date, 55 CSFs have been established, 14 of which are already registered as cooperatives with the CDA while others are in the process of registration.

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“The MOA between the Cooperative Development Authority and the Bangko Sentral ng Pilipinas manifests a strong convergence between the two agencies with the end in view of empowering MSMEs and cooperatives. Having a shared responsibility under the CSF law, the MOA clearly spells out the respective roles and responsibilities of the parties for a proper and effective implementation of the law and the IRR,” said CDA Chairman Orlando Ravanera.

Under R.A. 10744, the CDA is the designated lead implementing government agency responsible for the registration, regulation, monitoring and supervision of CSF cooperatives. The BSP, on the other hand, is mandated to: spearhead the promotion, creation and organizational development of CSF cooperatives; facilitate the acquisition by CSF cooperatives of technical assistance; and assist the CDA in setting the criteria and qualifications for CSF cooperatives.


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