DBP stresses repayment of Credit Surety Fund loans
by JM Dabangan
Tagum City (4 June) -- Development Bank of the Philippines wants to make sure that cooperatives borrowing capital through the Credit Surety Fund (CSF) should be able to pay back their loans.
During the recently held turning-over ceremony of P7 million to Beneficiaries of Agrarian Reform Community Multi-Purpose Cooperative (BARC MPC) at the Bulwagan ng Lalawigan, DBP Branch Head Fernando Lagahit emphasized the need to repay the loan that DBP was extending them.
The first to get from Mindanao, Davao del Norte based-BARC MPC got the P7 million fund from DBP, at eight percent annual interest, through the Credit Surety Fund (CSF) program initiated by the Bangko Sentral ng Pilipinas.
The Credit Surety Fund is a credit window for micro-small-medium entrepreneurs (MSMEs) extended to them without collateral.
CSF is being put up through contributions coming from cooperatives, the provincial government and government financial institutions, and is being used as surety cover of loans availed of by MSMEs.
In Davao del Norte, 22 cooperatives have contributed P3.6 million to the fund while the provincial government has placed its counterpart fund of P3.6 million also.
DBP has also turned over P2.6 million contribution for the fund. Land Bank of the Philippines (LBP) is also among the financial institutions assisting CSF program of BSP.
In a press conference, Lagahit stressed that the loan which DBP had granted collateral-free "is not a dole-out".
"We want this repaid because we want also to extend this to other coops which would like to go into credit surety fund," he told the media. "What we need are coops which are really sincere in going into business and (in) repaying what they get from the credit fund," he added.
Meanwhile, Davao del Norte Provincial Governor Rodolfo P. del Rosario on the same occasion said the provincial government had already waged education drive on how to run cooperatives.
Noting that cooperatives appeared ready to undertake their own projects after going through series of trainings, Del Rosario considered CSF as a right opportunity to grab to provide cooperatives their much-needed financial assistance.
"They are in the better position now. They understand what it means to borrow money and be able to repay what they borrow," he said.
Del Rosario advised cooperatives to establish good credit standing and credibility "so it would not be difficult to borrow the next time around and you could even borrow a much bigger amount."
Accepting the challenge, BARC MPC Chairman Anselmo R. Cole said his group can ably pay its borrowings from DBP. BARC MPC intends to reloan the P7 million to its members at 12 percent per annum. (PIA XI) [top]