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Bank finance for small businesses is available through the CSF cooperative
Once they join a cooperative recognized by the Credit Surety Fund, small enterprises now have a better chance of obtaining bank financing (CSF).
Sergio Herrero Jr., senior cooperative development specialist and director of the CDA National Capital Region’s (NCR) CSF Section, stressed the value of CSF cooperatives on Monday during the Laging Handa public briefing.
The CSF cooperative, according to Herrero, was established under Republic Act (RA) 10744 to assist micro, small, and medium-sized enterprises (SMEs), small cooperatives, and non-governmental organizations (NGOs) in obtaining financing through a surety cover that will be provided by a pooled fund of money from banks, local government units (LGUs), and large and well-managed cooperatives.
In order to inform LGUs and other stakeholders on how the CDA will accredit cooperatives per locale that will support small companies in their areas, he claimed that CDA is currently holding a number of events.
Since it will enable them to have insurance for the loans they will acquire from the banks for capital, Herrero claimed that this move will help small enterprises recover from the pandemic’s effects.
“Ang bigay sabihin, parang kolateral ito sa bangko para mapahiram po sila kaagad ng kaagarang puhunan na kakailanganin nila,” he said. Yet, the bank will use this as collateral so that they may acquire the money they require right away. Kailangan muna siyang pumasa sa qualification. But they must first meet the requirements),” he continued.
According to the law, a small firm may be awarded up to ten times the amount it contributed to the cooperative, according to Herrero.
Yet, if it is unable to obtain an endorsement, the CSF will offer up to five times cover in order for a bank to grant a small firm a loan, he said.
Herrero claimed that a cooperative recognized by the CDA for the CSF will enjoy tax exemption, which will therefore benefit its members, in addition to having a sure source of funding.
He stated that in order to join the CSF cooperatives, cooperatives must meet the requirements of being well-capitalized and well-managed.
Cooperatives, according to Herrero, need certificates of compliance.***
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