Small and Medium Enterprise (SME) Development

ABOVE: Entrepreneurs at a business start-up training by Alma Mons regional SME development agency

ADF’s SME development activities includes access to credit, support for SME development agencies and training and technical assistance for SMEs.

Access to credit has been one of the major problems for the SME sector in Serbia. On the supply-side, banks had to improve their services and outreach to businesses both geographically (unavailability of services in some regions) and sectorally (agricultural lending was considered too risky). On the demand-side, businesses were often intimidated by loan application requirements and procedures and did not know how to prepare appropriate business plans. ADF has organized bank fairs, assisted the development of rural credit programs, and provided direct assistance to SMEs. As a result of these activities, Serbian banks and other development institutions and provided $6,774,196 in recorded loans to farmer members of agricultural associations and cooperatives, SMEs and individual entrepreneurs.

Lack of access to business advisory services has hindered SME growth. ADF strengthens business service providers, enabling them to develop institutionally and provide existing and new businesses with competitive skills on an ongoing sustainable basis.

Improving SMEs’ access to skills in facilitated through education and training programs including human resource management, business skills, inventory management, and market and financial access programs.

Access to Credit

Bank Fairs

 ADF facilitates access to credit for SMEs, cooperatives, and individual entrepreneurs by organizing municipal bank fairs. ADF has organized 22 bank fairs, attracting some 2,300 representatives of private business and potential entrepreneurs. These bank fairs were conducted in partnership with municipalities in Vojvodina and Eastern Serbia (see annex). The fairs include presentations by banks of their various loans and application procedures to potential clients. Presentations feature both mainstream commercial banks and commercial banks with special SME funds supported by donors as well as national and regional development funds. Business consulting providers are introduced to potential SME clients requiring assistance in developing business plans and credit applications. These activities facilitate increased access to credit for SMEs, cooperatives, and individual entrepreneurs. They also enable SMEs, cooperatives and individual entrepreneurs to develop and improve business plans and strategies to enable them to qualify for loans. The bank fairs have extended the geographical availability of loans and development funding throughout Vojvodina and Eastern Serbia.

BELOW: Number of bank fairs held in municipalities

Rural Credit Programs for Farmers

 ADF works to ensure rural credit programs are available to farmers. For example, perceiving the reluctance of banks to provide loans to farm cooperatives, ADF and ProCredit Bank signed a Memorandum of Cooperation which promoted a rural credit program that both reduced risk to the bank and was very attractive to the farmers. ADF provided technical assistance to farmers to increase the quality and quantity of their products; introduce value-added services; locate markets, and negotiate forward sales for a better cash flow. ADF also provided assistance to farmers in preparing budgets, income statements, cash flow projections, and balance sheets for business plans, as well as in qualifying and applying for credit. In return, ProCredit Bank offered the farmers being assisted by ADF preferred bank terms including lower interest rates and extended payment terms and grace periods. Due to the success of this program, additional partnerships that facilitated access to credit for farmers and cooperatives were negotiated with other banks, the Opportunity Bank, the Vojvodina Provincial Fund, and the Ministry of Agriculture (MAFWM).

Support to Regional SME Development Agencies

 ADF provides assistance and support to regional SME development agencies. ADF has assisted such agencies in Novi Sad, Subotica, Sombor and Zrenjanin through the provision of support for training, consulting, mentoring services and other technical assistance to SMEs. Their client profile ranges from well-established SMEs, to entrepreneurs, managers, owners, start-ups, and vulnerable groups. Training and technical assistance has been provided in legal issues, taxation, financial management, strategic, marketing and business planning, and access to credit facilitation –with an increasing focus on market access and exports.

Support to Business Associations

 Chambers of Commerce. ADF works with Chambers of Commerce and other business associations to promote business development nd services. For example, ADF increased the capacity and strengthened the partnership and networking of three regional chambers of commerce in Banat as business service providers. Chamber of Commerce staff provided training to more than 2,200 participants in management, organization, quality management, and HACCP in 19 municipalities. The capacity of the Chamber of Commerce of Vojvodina and its 52,000 membership within the Union of Associations of Entrepreneurs of Vojvodina to provide business development services to SMEs was strengthened by ADF assistance. ADF provided computers for the 34 municipal associations to serve as resource centers for the business community and to enable utilization of the Chambers of Commerce software for an updated and consistent registry of entrepreneurs in Vojvodina.

Eastern Serbia Business Service Resource Centers

 ADF established nine Business Services Resource Centers (BSRCs) in Eastern Serbia in Veliko Gradiste, Golubac, Majdanpek, Kladovo, Negotin, Bor, Zagubica, Kucevo, and Malo Crnice. These Resource Centers work closely with the ADF CRDA organized Community Development Associations and Community Development Centers. The Business Services Resource Centers provide entrepreneurs, farmers, cooperatives, small and medium enterprises, and others in the private business sector with such services as consulting; business registration; developing business plans; facilitating access to credit and investments; and facilitating contacts with financial institution and development funds.