Bangko Sentral, Baguio City creates business surety fund

To improve the chances of business people in Baguio City getting financial support in spite of having no collateral, Bangko Sentral ng Pilipinas’ Monetary Board and the city government is setting up a credit surety fund.   The bankability of cooperatives and business people short on capital is expected to improve once the Baguio City Credit Surety Fund or Baguio CSF is launched on Monday, Nov. 5.   In place of collateral, the fund serves as surety for loans banks lend to micro, small and medium enterprises under the CSF program.   Seven cooperatives and non-governmental organizations will contribute P2.8 million to the fund and the local government of Baguio City leadership will provide P2 million.   Monetary Board member Peter Favila, Baguio City Mayor Mauricio Domogan, and stakeholders will sign a memorandum of agreement next week creating Baguio CSF.   Cooperatives and cash-strapped business people often fail to secure capital for lack of collateral, credit knowledge, and track record in the financial system.   Since August 2008, the CSF program has enhanced credit by pooling cash contributions from cooperatives, local government units and partner institutions. — VS, GMA News