loans for MSME

Approved loans for small businesses thanks to Credit Surety Fund Act — Sen. Bam

Small enterprises will now benefit from the Credit Surety Fund Cooperative Act of 2015 with the signing of its implementing rules and regulations (IRR), according to Sen. Bam Aquino.

 “Finally, small enterprises can access loans and financing with the full implementation of the Republic Act 10744,” said Sen. Bam.

 Sen. Bam was the author and principal sponsor of the measure in the Senate during his time as chairman of the Committee on Trade, Commerce and Entrepreneurship in the 16th Congress.

 The law institutionalizes the Bangko Sentral ng Pilipinas’ Credit Surety Fund (CSF) program, which provides small businesses loans ranging from P200,000 to P5 million.

 Sen, Bam pointed out that loan needs for small businesses usually range from P500,000 to P5 million, which is too big for microfinance institutions and perceived as too risky by banks, which usually ask for collateral.

 “Through this measure, we hope more small enterprises will have access to the capital they need to grow their business,” Sen. Bam said.

The law mandates the BSP, local government units, cooperatives, microfinance NGOs and government financing institutions (GFIs) to create an initial fund.

 This initial fund may be used by entrepreneurs and businessmen belonging to cooperatives and microfinance NGOs, which helped establish it, as collateral or guarantee for bank loans.

 Currently, the BSP’s CSFs exist in 46 provinces and cities with two more to be launched next week. As of April 30 2017, the total amount released through CSFs is P3.25 billion to 16,360 MSMEs.

 Republic Act 10744 aims to build the capability of MSMEs, cooperatives and non-government organizations in the areas of credit evaluation, loan and risk management, and good governance.

It also seeks to enhance the MSMEs’ credit worthiness and broaden access to credit facilities, and sustain the continuous flow of credit in the countryside.

“This will generate more employment and alleviate poverty through increased investments and economic activities,” Sen. Bam pointed out.

Bam: More support for poor Filipino families ​through Microfinance NGOs

Low-income households will be supported by more m​icrofinance non-government organizations (​MFI ​NGOs) with the signing of the Implementing Rules and Regulations (IRR) for Republic Act 10693 or the Microfinance NGOs Act.
​“This law will encourage more MFI​ NGO​s to ​help the poor through ​loans and​ ​training,” said Sen. Bam Aquino, who pushed for the law’s passage in the Senate as co-author and principal sponsor.
​​MFI NGOs give Filipinos access to low-interest, no collateral loans to pay for housing, medical, and educational needs​ as well as loans for small businesses.
“MFI NGOs​ aid​ our poor countrymen in times of inflation and price increases. They also provide financing and training for livelihood and small businesses so families can overcome poverty,” he added.
In 2013, MFI NGO members of the Microfinance Council of the Philippines, Inc. (MCPI) had a gross loan portfolio of over 15.26 billion pesos catering to more than 2.7 million micro-entrepreneurs.
​According to Sen. Bam, the law ​incentivizes microfinance NGOs to continue helping Filipinos overcome poverty not just through financing but also through financial literacy, livelihood, and entrepreneurship training.
​​The ​law provides microfinance NGOs needed support and incentives that includes access to government programs and projects, technical assistance and exemption from taxes.
​​Republic Act 10693 was one of Sen. Bam’s 16 laws in the 16th Congress. It was passed under his watch as chairman of the Committee on Trade, Commerce and Entrepreneurship.
​The ​law’s IRR is set to be signed today, August 16, 2016.
Scroll to top