Credit Surety Fund Program: A Solution to Creditworthiness Problem of SMEs – The Credit Surety Fund program is the long-awaited financial solution to the perennial creditworthiness problem of most micro small and medium enterprises (SMEs), the backbone of the country’s economy. This is in addition to the Industrial Guarantee & Loan Fund of the government financial institution, lead by Development Bank of the Philippines.
With Credit Surety Fund program, micro SMEs in provinces and cities that have Credit Surety Fund programs have better access to credit from banks even if they do not have the traditional hard collateral.
So far, the state-owned bank has approved the P27 million for 14 Credit Surety Fund programs from Cavite, Aurora, Bohol, Cebu, Negros Oriental, Iloilo, Negros Occidental, North Cotabato, General Santos City, Digos City, Compostela Valley, Davao del Norte, Davao Oriental and Davao City.
The Development Bank participation in the Surety Fund is underlines to their continued commitment to support this new approach to SME financing. They believed that the Credit Surety Fund program will have a direct effect on job generation in the countryside. More micro-entrepreneurs can expand their businesses and generate more employment opportunities.
I’m hoping that Credit Surety Fund program will be open in the whole country soon, for this will accelerate the process of approving small and medium enterprises loans.