2nd Quarter Regional Cooperative Development Council-1 Meeting, Candon City Center for Culture and Arts, Candon City, Ilocos Sur, June 11, 2019

1. THE CREDIT SURETY FUND
COOPERATIVE ACT OF 2015
IRR Approved on June 20, 2017

2. IMPLEMENTING RULES AND
REGULATION OF REPUBLIC ACT NO.
10744
BANGKO SENTRAL NG PILIPINAS
COOPERATIVE DEVELOPMENT AUTHORITY
DEPARTMENT OF FINANCE

3. RULE 2 –
COOPERATIVE DEVELOPMENT
AUTHORITY
Sec. 1 – The Cooperative Development
Authority shall be the government entity in
charge of REGISTRATION, REGULATION,
MONITORING and SUPERVISION of CSF
cooperatives.

4. RULE 2 – COOPERATIVE DEVELOPMENT
AUTHORITY

5. RULE 3. THE CREATION OF CREDIT
SURETY FUND DEPARTMENT AND ITS
FUNCTION

6. CSF Team in Region 1

7. Existing
CSF in
Region 1
La Union Credit Surety
Fund (LCSF)
Pangasinan Credit Surety
Fund (PCSF)

8. Credit SuretyCredit Surety
Fund OperationsFund Operations

9. 9
CREDIT SURETY FUND
Conceptualized in 2008 and
being spearheaded by Bangko
Sentral ng Pilipinas (BSP) to
support the micro, small and
medium enterprises (MSMEs)
in their role as drivers of the
economy.

10. 10
CREDIT SURETY FUND
Credit enhancement scheme that
aims to increase the
creditworthiness of MSMEs which
are experiencing difficulty in
obtaining loans from banks due to
lack of acceptable collaterals, credit
knowledge and credit track records.

11. 11
WHAT THE FUND IS…
 Alternative to acceptable
collaterals.
 Security for loans of MSMEs
who are members of a
cooperative.
 Assurance for payment of
bank loans.

12. 12
It is a credit enhancement program designed
to link the important players that would make
the program successful.
Cooperatives
Local Government
Partner Institutions
Donors
Banks
Government Agencies
Bangko Sentral ng Pilipinas

13. 13
WHO CAN JOIN THE CSF?
1. Well-capitalized and well-
managed cooperative/NGO
 “Millionaire” which has an
asset size of not less than P1.0
million
 Has an adjusted capital to
assets ratio of at least 20%
1. Can contribute a minimum of
P100,000.00

14. CREATING THE CSF
14
Credit Surety
Fund
COOPs LGU
P5
million
P5
million
DBP
P3
million
Land
BankP3
million
14
IGLF
P5
million

15. Credit Surety
FundP21
million
Security or collateral for MSME loans

16. 16
SUSTAINABILITY OF THE CSFSUSTAINABILITY OF THE CSF
Republic Act No. 10744
“Credit Surety Fund Cooperative Act of 2015”
06 February 2016
AN ACT PROVIDING FOR THE CREATION AND
ORGANIZATION OF CSF COOPERATIVES TO MANAGE
AND ADMINISTER CREDIT SURETY FUNDS TO ENHANCE
THE ACCESSIBILITY OF MICRO, SMALL AND MEDIUM
ENTREPRENEURS, COOPERATIVES AND NON-
GOVERNMENT ORGANIZATIONS TO THE CREDIT
FACILITY OF BANKS AND FOR OTHER PURPOSES.

17. 17
REPUBLIC ACT NO. 10744REPUBLIC ACT NO. 10744
Credit Surety Fund Cooperative Act of 2015Credit Surety Fund Cooperative Act of 2015
Salient features:
Grants juridical personality to a proposed CSF
Cooperative and is evidenced by a Certificate of
Registration;
Exemption from the Insurance Code (not doing an
insurance business)
Tax exemption of CSF Cooperatives
Limited liability of CSF stakeholders
Maximum loan availment (10 times of contribution)

18. 18
THE BOARD OF DIRECTORSTHE BOARD OF DIRECTORS
GFIs, IGLF, GAs
REPRESENTATIVES
LGU
REPRESENTATIVE

19. 19
UNDER REPUBLIC ACT NO. 10744UNDER REPUBLIC ACT NO. 10744
COOP/NGO
REPRESENTATIVES
GFIs, IGLF & GAs
REPRESENTATIVES
LGU
REPRESENTATIVE
 Board Composition: not less than seven (7) and not more
than fifteen (15)
 Term of Office of the Elected Members: Two (2) years
IRR Rule 16,
Sec 1, 2

20. 20
UNDER REPUBLIC ACT NO. 10744UNDER REPUBLIC ACT NO. 10744
IRR Rule 6 Sec 3; Rule 7 Sec 4; Rule 8 Sec 4; and
Rule 5, Sec 5;
Voting Rights of the BOD Members
 Regardless of whether contribution is treated as
“Investment” or “Grant”
BOD
Member
Voting Rights
With Without
Coops/NGOs 
GFIs/IGLF/GA
s*

LGUs* 

21. 21
FUNCTIONS OF THE OC
Formulates policies and in-charge of the
overall management of the CSF which
includes:
Rules and regulations
Criteria for admission of new
members to CSF
Issuance of surety cover
Investment policies
Selection of trustee bank

22. 22
WHO CAN BORROW THROUGH
THE CSF?
MSMEs who are members of
cooperatives
Cooperatives that have
businesses

23. Loan
Amount
Up to 10
times the
cooperative
s’
contribution
s to the CSF.
5 times, in
case the
coop
borrower
has no
endorser.
Surety
Cover
80% of the
loan
amount
Lenders
Banks with
rediscounti
ng line
with the
BSP, LBP
and DBP

24. 24
BORROWING THROUGH THE CSF?
Coop
Office
Coop
Memb
er
Bank
Coop
Memb
er
CSF OC
Applies
for
Loan
Evaluat
es the
loan
and
endorse
s to the
OC
Bank
evaluat
es,
process
es and
releases
the loan
Receive
s loan
procee
ds
Evaluat
es the
loan
and
issues
Surety
Cover

25. 5% Unsecured
4%
Secured by Stock-
in-Trade
3% Chattel Mortgage
2% Real Estate
Mortgage
SUGGESTED SURETY FEE

26. DEFAULT
(If the borrower is unable to pay loan)
Files
claim
to CSF
CSF OCBank
Coop
Office
OC
books
the
claim
against
the
Coop
Coop
Memb
erCOOP
collects
from
member
Member
pays past
due loan
to COOP
COOP
remits
collectio
n to CSF
Pays the
Bank

27. 27
BENEFITS OF THE CSF TO COOPS?
Provides members of good standing
access to bank credit
Increases net worth due to increase in
membership
Increases income due to surety fees
collected
Improves coops’ credit management and
marketing skills through the training
program component of the CSF.

28. 28
BENEFITS OF THE CSF TO MSMEs?
Easier access to credit from banks
Enhance business, management
and financial skills through
trainings and seminars

29. 29
BENEFITS OF THE CSF TO THE LGU?
Supports poverty alleviation
program through:
Increase in economic activities
Creation of more jobs
Non-susceptibility to high cost of
borrowings (i.e. 5-6 and loan
sharks)
Increases revenue in the form of
taxes and fees

30. 30
48 CSFs ESTABLISHED
NATIONWIDE As of 30 June 2018
LUZON
1. Cavite
2. Aurora Province
3. Albay
4. Occidental Mindoro
5. Pangasinan
6. Oriental Mindoro
7. Benguet
8. Puerto Princesa City
9. Palawan
10. Laguna
11. Baguio City
12. Tarlac
13. Bataan
14. Quezon City
15. Marikina City
16. San Jose City, N.E.
17. Science City of Munoz
18. Nueva Vizcaya
19. Zambales
20. Cagayan
21. Nueva Ecija
22. Santiago City, Isabela
23. Parañaque
24. Cabanatuan
25. La Union
MINDANAO
1. Davao del Norte
2. Compostela Valley
3. Davao Oriental
4. North Cotabato
5. Zamboanga del Norte &
Dipolog City
6. South Cotabato
7. Sarangani
8. General Santos City
9. Davao City
10. Northern Mindanao
11. Agusan del Norte
12. Butuan City
13. Malaybalay City, Bukidnon
14. Valencia City, BukidnonVISAYAS
1. Bohol
2. Negros
Oriental
4. Negros
Occidental
5. Cebu
7. Aklan
8. Mandaue
City

31. CSF LOAN SUMMARY

32. 32
REQUIREMENTS
1. Approved Board Resolution
2. Latest Audited Financial
Statement
3. Duly Accomplished CSF
Application Form

33. ABC CSFABC CSF
Members Amount of
Contribution
1. Coop A 100,000
2. Coop B 500,000
3. Coop C 1,000,000
LGU 1,600,000
LBP 1,000,000
DBP 1,000,000
IGLF 1,000,000
Total 6,200,000

34. BORROWING THROUGH THE CSF
Coop
B
Coop
Memb
er
Bank
34
CSF OC
Applies
for a
P2.5M
Credit
Line
OC
evaluates
the loan
and
issues
the
surety
cover
Bank
releases
the loan
Receives
loan
proceed
s
Coop
B

35. REGISTRATION OF EXISTING CSF
MEMORANDUM CIRCULAR 2018-05
GUIDELINES FOR REGISTRATION OF CREDIT
SURETY FUND COOPERATIVES (CSF Cooperatives).
Coverage
All existing CSF’s established and launched by the
Bangko Sentral ng Pilipinas (BSP) prior to the
effectivity of Republic Act. No 10744 and its IRR and
those thereafter organized by it shall be covered by
this Circular.

36. MEMORANDUM CIRCULAR 2019-05
RELAXATION OF DOCUMENTARY
REQUIREMENTS FOR REGISTRATION OF CREDIT
SURETY FUND COOPERATIVES (CSF COOPS)

37. MEMORANDUM CIRCULAR 2019-05
RELAXATION OF DOCUMENTARY REQUIREMENTS
FOR REGISTRATION OF CREDIT SURETY FUND
COOPERATIVES (CSF COOPS)
COVERAGE.
– This Circular covers all the existing fifty-four (54) CSFs
established by the Bangko Sentral ng Pilipinas (BSP) all
throughout the country from the year 2008 to 2018
only.

38. DOCUMENTARY REQUIREMENTS
The following documents shall be submitted to
the CDA in such number of copies as indicated
below:
1.Cooperative Name Reservation Notice (CNRN)
-1 original and 3 photocopies;
2.Articles of Cooperation and By-laws – 2
original copies and 2 photocopies for each;

39. DOCUMENTARY REQUIREMENTS
The following documents shall be submitted to the CDA in such
number of copies as indicated below:
3.Sworn Statement of the Treasurer elected by the subscribers
showing that at least twenty-five per centum (25%) of the
authorized capital share has been subscribed at the time of
registration, and least twenty-five per centum (25%) of the total
subscription has been paid upon subscription: Provided, that in
no case shall the paid-up share capital be less than Five
Thousand Pesos (P5,000.00)- 4 original copies;
4.Surety Bond of Accountable Officers handling funds,
properties and securities- 1 original and 3 photocopies;

40. DOCUMENTARY REQUIREMENTS
The following documents shall be submitted to the CDA
in such number of copies as indicated below:
5.Certificate of Contributors Orientation Seminar- 1
original and 3 photocopies;
6.Economic survey except for CSFs established prior to
the enactment of the CSF law and its IRR - 2 original
copies and 2 photocopies
7.CSF MOA signed by all stakeholders and the BSP
together with the other documentary requirements
enumerated in Section 7, Rule 14 of the RA 10744.
May submit Certified True Copy (4 copies)

41. DOCUMENTARY REQUIREMENTS
The following documents shall be submitted to the CDA
in such number of copies as indicated below:
8.The resolution of the LGU’s Sangguniang
Panlalawigan or Sangguniang Panlungsod, as the case
may be, indicating, among others, its commitment to
join the CSF Cooperative, the amount of initial
contribution which must be equal to or more than the
aggregate contributions of the participating
cooperatives/NGOs, and authority for the Local Chief
Executive to sign and execute the MOA with other
stakeholders- 4 certified true copies.

42. DOCUMENTARY REQUIREMENTS
A certified true copy of each of the following documents
mentioned in Section 7, Rule 14 of the RA 10744 shall be
attached to the MOA, except letter
MEMBER COOPERATIVE/NGO
1. Approved General Assembly Resolution duly signed by all
members of the Board of Directors, authorizing the
cooperative/NGO to join or participate in the CSF
Cooperative. Said resolution should indicate the amount of
initial investment and designation of one representative and
one alternate (a board member and/or Manager) who are
authorized to sign contracts or agreements with the CSF
Cooperative. An original copy of said GA Resolution shall be
submitted;

43. DOCUMENTARY REQUIREMENTS
If the authority to join or participate in the CSF
Cooperative is by virtue only of a Board Resolution, the
applicant must execute an undertaking under oath,
that said Board Resolution shall be presented and
submitted to the General Assembly for confirmation in
the General Assembly meeting that will be conducted
in the year 2019. The original copy of the GA Resolution
confirming the authority of the cooperative to join or
participate in the CSF Cooperative shall be submitted to
the Authority within thirty (30) days from the date of
the GA meeting;

44. DOCUMENTARY REQUIREMENTS
2. The latest audited financial statements of the
cooperative with the accompanying
notes/schedules;
3. The Certificate of Registration with the CDA or
SEC and the BIR;
4. The Certificate of Compliance from CDA;
5. List of current Board of Directors, Manager
and Credit or Loan Officer;
6. Duly accomplished CSF Membership
Application Form.

45. FOR TECHNICAL ASSISTANCE ON THE
REGISTRATION PROCESS, KINDLY CONTACT
CDA DAGUPAN EXTENSION OFFICE
@ TEL NO. (075) 522-8285 AND LOOK FOR
CHRISTINE JOY, FIONA (09071957337) OR
SHERWIN (09395177322).

46. Thank You
SHERWIN M. ARCIPE
SR. CDS / CSF HEAD REGION I