Mandaue City, Cebu, Philippines – The wave of massive Credit Surety Fund (CSF) services promotion intensifies as CSF Region VII elevated its boosting platform to social media through Mang Pipol TV of Cebu People’s Multipurpose Cooperative. The latter is one of the original cooperators of Cebu City Credit Surety Fund Cooperative.

Usapang Kooperatiba hosted by Jacob Layan featuring Ms. Gina F. Repunte, Senior Cooperative Development Specialist CSF of Cooperative Development Authority Region VII Extension Office, and Atty. Ronalyn M. Torres, Assistant Legal Officer. The team of two highlighted the nature, benefits and challenges of a credit surety fund cooperative.

Compared with a primary cooperative, a credit surety fund coop is a special type of cooperative by virtue of Republic Act 10744 also known as Credit Surety Fund Act. CSF Cooperative membership consists of primary cooperatives, non-government organizations (NGO’s), local government units (LGU’s), government financial institutions such as Land Bank of the Philippines and Development Bank of the Philippines and Philippine Guarantee Corporation.  Here, the LGU is considered as a crucial partner for the creation of CSF. This is a breakthrough from the traditional concept of dole outs, this LGU partnered CSF coop instead, provides capitalization in a form of grant.

What are the qualifications to be a member of the CSF Coop? Primary cooperatives; and non-governmental organizations (NGOs) must be well-managed and well-capitalized to guarantee that the cooperative operates safely and soundly even in its early stages. It is imperative that the NGO members have access to a program aimed at mitigating poverty. LGU will match the other members’ contributions in full. The more money the members raise, the more money will be used as surety cover to be used as collateral for bank loans.

It must be in existence for at least a year, compliant with the Cooperative Development Authority’s reporting requirements, with complete required training, and—most importantly—have no leadership disputes in order to achieve well-managed status. The condition for being well-capitalized is having an adequate capital ratio and a net surplus.

The four registered cooperatives in the area, namely the Negros Oriental CSF Cooperative, Mandaue City CSF Cooperative, Bohol CSF Cooperative, and Cebu City CSF Cooperative, are actively working to increase their membership. The Mandaue City CSF Cooperative was able to assist Paknaan Multi-purpose Cooperative with the need for additional funding for their members’ broomstick business, commonly known as the “silhig lanot” sa Paknaan, as an example of how it aids the underprivileged.

To help the cooperatives to loan with banks without hard collateral, is one of the rallying points of the CSF Cooperatives. To assure high impact and productive loan engagement, Financial Literacy, Credit Management and other credit enhancement seminars are encouraged among coop members. This is to educate the members not to engage with the services of loan sharks.

The number of cooperative members who benefited from the registration process outweighs any difficulties the CSF Cooperative may face. In order to finance the cultivation of hogs, the production of rice and corn, and the dissemination of carabaos, the agricultural cooperative Bagtic Masagana MPC in Bohol was able to obtain a loan from the lending bank through the Bohol CSF Cooperative. Via the Negros Oriental CSF Cooperative, Tolong MPC was able to improve their lending services for their farmer members all the way from Negros Oriental. Testimonials from actual clients of Cebu Peoples’ MPC, including one of the founding members of Cebu City CSF Cooperative, who expressed satisfaction with their services.

As much as 10X the amount of its contribution, a primary cooperative member has the opportunity to avail of this loan without the need for hard collateral for selected lending banks. The CSF Coop will issue the Surety Cover to assure payment to the lending banks.

These and more are the essential reasons why the promotion of CSF Cooperatives is now a top-priority of the Cooperative Development Authority. Expect more creative, expansive and enriching marketing campaigns for CSF cooperatives. (RMTorres)