CEBU CITY, 14 February 2020 – As part of their commitment to comply with Republic Act No. 9510 or the Credit Information System Act (CISA), cooperatives based in Cebu—including Cebu CFI Community Cooperative—and those from other nearby locations underwent a technical training for submitting entities of the Credit Information Corporation (CIC) on 07 February 2020 at the Griffin Hotel and Suites in Cebu City.
In response, the CIC spearheaded the workshop to provide hands-on training for the cooperatives and assist them with the technical requirements for submission and compliance.
Department Manager for Credit Information Management System (CIMS) Ma. Bernadette Bautista led the technical workshop and discussed the ease of submission to the CIC.
“Submission to the CIC only requires a spreadsheet, an internet connection, and some freeware. The system was designed for small and big lenders alike. This assures an equal level of participation no matter how big or small they are,” Bautista mentioned.
CIC President and CEO Jaime Casto Jose P. Garchitorena is grateful to the participating cooperatives for reaching out to the agency.
“The old idea was that small cooperatives would have no use of the CIC, with nay-sayers claiming that credit report and risk-based lending were only for “sophisticated” banks. In fact, some of the CIC’s most enthusiastic supporters are small lenders because the risk of lending to known bad borrowers poses a great risk to their sustainability,“ the PCEO explained.
To date, 40% of the financial institutions submitting live credit data of borrowers to the CIC database are cooperatives which are often designated as conduits of funding, especially to the underserved and unserved markets.
Under the law, submitting entities refer to any entity that provides credit facilities. Broadly covered under this definition are lending institutions regulated by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) including cooperatives and micro-financing institutions (MFIs).
Garchitorena also emphasized that “the cooperatives’ inclusion in submission data will fuel economic progress. Through using the credit reports of existing and potential borrowers, bad debt is reduced and more cooperative funds are made available to new borrowers.”
He added that the cooperatives’ compliance with the CISA is a significant step towards improving the access to credit of micro, small, and medium enterprises (MSMEs).
The CIC likewise lauds the support of the Cooperative Development Authority (CDA), especially with the issuance of its Memorandum Circular No. 2019-01 enjoining lending cooperatives to submit factual basic credit data of all their borrowers to the CIC.
“Having the full support of the CDA—being the cooperatives’ regulatory agency—is crucial in inculcating a truly inclusive lending environment,” Garchitorena ended.
This press release had been picked up by BusinessMirror.